The e-commerce giant had even written to the Reserve Bank of India (RBI) alleging collusion by Future Retail and banks. In the letter it has said Future Retail should not be allowed to go into bankruptcy proceedings as that would impact its rights further.
The Mumbai bench of the National Company Law Tribunal (NCLT) on Wednesday admitted Bank of India’s petition under Section 7 of Insolvency and Bankruptcy Code (IBC) to start insolvency proceedings against Future Retail and appointed an interim resolution professional (IRP) in the matter.
In an oral order, the two-judge bench, presided over by Justice Pradeep Narhari Deshmukh and Shyam Babu Gautam, said, “The company petition is admitted and Vijay Kumar Iyer is appointed as IRP. The intervention application is dismissed.”
The public sector lender had moved the insolvency petition against Future Retail on April 14 for non-payment of dues under the terms of agreement it signed with the Future Group. It was seeking admission of its petition and the appointment of an IRP.
E-commerce giant Amazon had subsequently moved the bankruptcy tribunal with an intervention application under Section 65 of IBC in the matter alleging that lender had colluded with the corporate debtor, Future Retail, to deny Amazon its rights in the case. Hence theinsolvency petition under Section 7 of IBC should not be admitted, it had argued.
However, Bank of India had opposed Amazon’s intervention application stating that the US commerce giant does not have any locus standi on the matter as it is not a creditor of Future Retail. Also, lawyers representing the lender had alleged that Amazon was using a stalling tactic to delay the admission of the petition.
The e-commerce giant had even written to the Reserve Bank of India (RBI) alleging collusion by Future Retail and banks. In the letter it has said Future Retail should not be allowed to go into bankruptcy proceedings as that would impact its rights further.
Generally, a petition moved under Section 7 of IBC should be admitted by the adjudicating authority within 14 days of the application being moved. However, the bankruptcy tribunal took more than three months in this matter to admit the petition.
Future owes over Rs 15,000 crore to 26 lenders. Future Group, in 2020, had decided to engage in a slump sale of its unlisted and listed companies to Reliance Retail for a consideration of about Rs 25,000 crore to address its ballooning debt.
However, Amazon, which had in 2019 acquired 49 per cent in Future Coupons, which owns 10 per cent in Future Retail, accused Future Retail of breach of contract for its agreement with Reliance Retail.
Recently, in a regulatory filing, Reliance Industries had informed that the deal with Future Retail will not fructify as the company’s secured creditors had voted against the scheme.
