Ajit Karn
Kishore Biyani has withdrawn his resignation from the suspended board of debt-ridden Future Retail Ltd nearly 1.5 months after submitting it.
Mr. Biyani was requested to retract his resignation letter after the Resolution Professional of Future Retail Ltd (FRL), which is undergoing an insolvency resolution process, objected to its contents.
FRL informed the bourses, “Kishor Biyani has withdrawn his resignation via letter dated 10 March 2023,”
This past week, the RP of FRL filed an application with the National Company Law Tribunal (NCLT) against the company’s former and current directors for causing creditors a loss of 14,809,44 crore. Future Retail Ltd (FRL) stated in a regulatory filing that in the application filed before the Mumbai bench of the NCLT, the Resolution Professional (RP) requested that the tribunal instruct the present and former directors of FRL “to contribute the amount to the company.”
Mr. Biyani submitted his resignation on January 23.
Mr. Biyani had written an emotional farewell in his resignation letter, stating that FRL, with which he had been associated since the company’s inception in 2007, was confronting CIRP (Corporate Insolvency Resolution Process) due to a “unfortunate business circumstance.”
The letter, a copy of which was shared with the stock exchanges, stated, “As I understand it, I have completed all the required handholding within my capacity for you to take over the entire control of the company and its assets. I have also completed the handover of whatever information and data was available with the previous management or could be retrieved from former employees or third parties. I have also shared with you all the insight about the business and its operations.”
Mr. Biyani (61) has also assured lenders of his cooperation.
“Needless to say, despite my resignation, I will be available for any assistance I can provide, given my limited resources and capacity to resolve any company-related issue,” he said.
FRL operated numerous retail formats in the hypermarket supermarket and residential segments, including Big Bazaar, Easyday, and Foodhall, among others. FRL operated over 1,500 locations in nearly 430 cities at its zenith.
Bank of India brought it into insolvency proceedings after it defaulted on its liabilities.
In July 2022, the Mumbai division of the National Company Law Tribunal ordered FRL to be placed into insolvency.
It was one of the 19 Future group companies operating in the retail, wholesale, logistic, and warehousing sectors that were to be transferred to Reliance Retail as part of a 24,713 crore transaction announced in August 2020.
However, financiers had rejected Reliance’s acquisition of the 19 Future group companies, including FRL, due to Amazon’s legal challenge.
On the final list of prospective candidates for the acqzuisition of FRL are 13 companies, including Reliance Retail, Adani Group’s joint venture April Moon Retail, and 11 other companies.
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In August of last year, the stock market regulator Sebi ordered a forensic audit of FRL’s financial statements for the fiscal years 2019-2020, 2020-21, and 2021-22.
Sebi also requested an audit of FRL’s Related Party Transactions (RPT) with three other Future group companies: Future Enterprises Ltd, Future Consumer Ltd, and Future Supply Chain Solutions Ltd.
RPT refers to a transaction or arrangement between two parties with a pre-existing business relationship or common interest.
