RP detects Rs 2,155 cr fraudulent transaction in Future Retail
In a significant development, the Resolution Professional (RP) of Future Retail Limited (FRL) has filed an application before the National Company Law Tribunal (NCLT) against certain individuals, including Kishore Biyani, alleging fraudulent transactions. The application seeks to avoid the transactions under the applicable provisions of the Insolvency and Bankruptcy Code (IBC).
The move follows a report by Nangia & Co. LLP, which was appointed as ‘Transaction Review Auditor’ by the RP. The report identified transactions that could be classified as preferential, undervalued, extortionate, and fraudulent.
The RP has estimated the impact of these transactions on the Company to be Rs 2155.02 crore. However, due to information asymmetry, the RP is currently unable to ascertain the exact amount of lease rentals paid by the Company before the insolvency commencement date. The RP reserves the right to ascertain this amount later.
The parties involved in the alleged fraudulent transactions include Kishore Biyani, Mr. Rakesh Biyani, Mr. Jacob Mathew, Mr. Ravindra Dhariwal, Ms. Gagan Singh, Mr. Shailendra Bhandari, Ms. Sridevi Badiga, Mr. Rahul Garg, and several other companies.
It must be noted that Future Retail Limited (FRL) has failed to secure a viable resolution plan, leading to the initiation of liquidation proceedings. The company’s creditors have rejected the sole resolution plan submitted by Space Mantra Private Limited, deeming it inadequate to address FRL’s financial woes. Consequently, the Resolution Professional has filed an application with the National Company Law Tribunal’s Mumbai bench to initiate liquidation proceedings under Section 33 of the Insolvency and Bankruptcy Code, 2016.
It is to be mentioned here that as many as 49 companies had shown interest in acquiring Future Retail through the Corporate Insolvency Resolution Process (CIRP) in April this year, when the resolution professional had invited bids for the company. Among the 49 firms, Reliance Retail Ventures, Adani Group-backed April Moon Retail, Jindal Power, UK-based WHSmith Travel are some of the big firms vying for Future Retail, which owned brands like Big Bazaar.
Insolvency proceedings against the company began on June 20, 2022, after the Mumbai bench of the National Company Law Tribunal (NCLT) admitted the insolvency plea filed by Bank of India against the company.
Also See: Kishore Biyani moves HC against BDO forensic audit of Future Retail
