Trouble doesn’t seem to be ending anytime soon for India’s Kishore Biyani-led Future Group. A court yesterday (July 20) ordered the initiation of insolvency proceedings against Future Retail, its retail arm.
The order by the National Company Law Tribunal (NCLT) came on the petition filed by the Bank of India and will allow its creditors to find a new owner for the firm.
It must be noted that Future Retail, once India’s second-largest retail chain, is in soup over its business deals with Reliance Industries (RIL) and Amazon India.
In October 2020, it tried to sell most of its business to Mukesh Ambani’s RIL for $3.4 billion (24,713 crore rupees). That, however, didn’t go down well with Amazon India which went to court saying the deal violated its own pact with Future.
In 2019, Amazon India had invested around $200 million in Future Coupons, the promoter entity of Future Group which, in turn, holds a 9.82% stake in Future Retail.
The NCLT’s latest order has also upset the Indian unit of US-based Amazon. The company filed an intervention request to halt the insolvency proceedings, which has been rejected by the court. Amazon India had alleged that Bank of India’s plea was of “fraudulent and malicious intention.”