Future Retail is facing CIRP (Corporate Insolvency Resolution Process) as a “result of unfortunate business situation”, says Biyani
New Delhi: Kishore Biyani has stepped down from the suspended board of Future Retail and has resigned as chairman and director of the company, which is currently facing insolvency proceedings before the NCLT.
In his emotional farewell, Biyani, who was associated with Future Retail Ltd (FRL) since 2007 when it was incorporated, said it was facing CIRP (Corporate Insolvency Resolution Process) as a “result of unfortunate business situation”.
“While the company was always my passion and I have done everything in my power for its growth, I have to accept reality and move on,” said Biyani in his resignation letter to the resolution professional of the company.
The letter, a copy of which was shared with the stock exchanges, said: “As I understand, I have completed all the required handholding within my capacity for you to take over the entire control of the company and its assets and I have also completed the handover of whatever information and data, which was available with the earlier management or which could be retrieved from ex-employees or third parties and have shared with you all the insight about the business and operations and various hurdles faced by the earlier management.”
FRL, in a regulatory filing, informed that Biyani has “tendered a letter of his resignation from the position of the “Executive Chairman and Director” of the company.
His resignation “shall be placed before the Committee of Creditors, as per the Insolvency and Bankruptcy Code, 2016”, the company added.
The resolution professional of Future Retail Ltd (FRL) has received intimation through an e-mail on January 24, 2023.
Biyani, who was also known as a retail tsar in India, is known as the pioneer of modern retail in India, who took the modern brick & mortar format among the masses.
FRL operated multiple retail formats in both the hypermarket supermarket and home segments under brands such as Big Bazaar, Easyday, Foodhall. At its peak, FRL was operating over 1,500 outlets in nearly 430 cities.
Biyani (61) has also assured to cooperate with the lenders.
“Needless to say, that in spite of my resignation, I would be available for all possible help, which can be done by me with my limited resources and ability to resolve any issue related to the company,” he said.
FRL was dragged into insolvency proceedings by its lender Bank of India after it defaulted on loans.
The Mumbai bench of the National Company Law Tribunal had on July 2022 directed to initiate insolvency against FRL.
It was part of the 19 Future group companies operating in the retail, wholesale, logistic and warehousing segments, which were supposed to be transferred to Reliance Retail as part of a Rs 24,713-crore deal announced in August 2020.
However, lenders had rejected the takeover of the 19 Future group companies, including FRL, by Reliance amid a legal challenge by Amazon.
As many as 13 companies including Reliance Retail, Adani Group’s JV April Moon Retail and 11 other companies have made it to the final list of prospective bidders for acquiring FRL.
Last year in August, stock market regulator Sebi had ordered a forensic audit of the accounts of FRL for the financial years 2019-20, 2020-21 and 2021-22.
The Securities and Exchange Board of India (Sebi) has also asked for an audit of FRL’s Related Party Transactions (RPT) with three other Future group firms — Future Enterprises Ltd, Future Consumer Ltd and Future Supply Chain Solutions Ltd.
RPT refers to a deal or arrangement made between two parties related to each other by having a pre-existing business relation or common interest.