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Future retail insolvency: ‘Directors caused more than ₹14,800 cr loss to creditors’


Debt-ravaged Future Retail Ltd, which is in insolvency proceedings, said on Friday that its Resolution Professional has petitioned the National Company Law Tribunal (NCLT) against the company’s former and current directors for causing a loss of 14,809.44 crore to creditors.

The Resolution Professional (RP), in the application filed with the Mumbai bank of the NCLT, has sought direction from the tribunal against the current and former directors of FRL to contribute the amount to the company, Future Retail Ltd said (FRL) in a regulatory submission.

“At the date of filing of said application, based on the limited information available, the RP has quantified the potential loss caused to FRL’s creditors to be 14,809.44 crore, and has sought direction against the respondents of the said application to contribute such amount to FRL,” the company said as quoted by PTI.

It said RP has filed an application with the NCLT Mumbai against directors/former directors of the company under the Insolvency & Bankruptcy Code 2016.

Future Retail 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 ordered insolvency against FRL in July 2022.

In January, the company’s promoter, Kishore Biyani, stepped down from FRL’s suspended board of directors and resigned as chairman and director of the company. Last August, stock exchange regulator Sebi ordered a forensic audit of FRL’s accounts for fiscal years 2019-20, 2020-21 and 2021-22.

The regulator has also requested 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 between two parties linked by a pre-existing business relationship or common interest, PTI reported.

FRL was one of 19 Future group companies active in the retail, wholesale, logistics and warehousing segments, which were to be transferred to Reliance Retail as part of a 24,713 crore deal announced in August 2020.

However, lenders had rejected a 24,713 crore acquisition of the 19 future group companies including FRL by Reliance amid legal challenge by Amazon.

A total of 13 companies – including Reliance Retail, Adani Group’s JV April Moon Retail and 11 other companies – have made it to the final list of potential bidders for the acquisition of FRL.

However, last month, FRL said the deadline for submitting bids (resolution plans) for the company was February 20, 2023, and it has still not received a bid.

(with PTI inputs)

Joanna Swanson

Joanna Swanson is Europe correspondent at the Thomson Reuters Foundation based in Brussels covering politics, culture, business, climate change, society, economies and inclusive tech. With specific focus in breaking news, she has covered some of the world's most significant stories.