Saturday, June 22, 2024
HomeCompaniesFuture Retail RP says BOI cannot initiate any action against company under...

Future Retail RP says BOI cannot initiate any action against company under IBC

Published on

Latest articles

Kotak Mahindra shares rise 4% on RBI nod to Zurich Insurance buying 70% in Kotak General

Kotak Mahindra shares rise 4% on RBI nod to Zurich Insurance buying 70% in...

Vodafone Idea shares zoom 14% today; key technical levels to watch out for

Vodafone Idea shares zoom 14% today; key technical levels to watch out for Vodafone Idea...

Nadeem Amin is the New President for Netstal Americas

Nadeem Amin is the New President for Netstal Americas Netstal appoints Nadeem Amin as its...

SCREEN Launches High-Density SU Ink For Uncoated Papers Used By Truepress JET 520HD Mono

SCREEN Launches High-Density SU Ink For Uncoated Papers Used By Truepress JET 520HD Mono It...


The resolution professional in the bankruptcy proceedings of Future Retail has told the Bank of India that it cannot initiate any kind of action to classify the retail company’s loan account as fraudulent as it was under moratorium and as such the IBC prohibited any such action including legal suits.

“ No proceedings in relation to classifying the loan accounts of the corporate debtor as fraudulent, including any consequences of such classification, may be undertaken by the Bank during the subsistence of the prevailing moratorium,” the RP said.

This was in response to a letter written by the bank earlier in the month to the former management of the company, citing a forensic audit initiated by the bank where certain transactions undertaken by the company and its promoters were liable to be classified as fraudulent under banking regulations. Incidentally, it was the Bank of India that had dragged Future Retail to the bankruptcy court, over non-payment of dues.

The forensic audit was conducted by BDO India LLP and submitted to the bank this month. In its letter to Future Retail, the State-owned bank has said that it would be looking at the ‘fraud’ angle with respect to the transactions that the forensic audit has covered. It also asked for an explanation and submission from the former management about the transactions. The transactions pertained to the period from April 1, 2017, to April 30, 2022.

The RP, in his response, pointed out that the time period during which the transactions had been carried out was prior to the date that insolvency proceedings had been initiated. He also said that the suspended management had not provided information about the details of many transactions, and it was still seeking data from them. He also told the bank that it could initiate any action against the RP for any action of the company prior to the insolvency commencement date.

Future Retail owes over ₹21,000 crore to financial creditors. Another company in the group Future Lifestyle Fashions owes over ₹3,700 crore to lenders.





Source link

More like this

Kotak Mahindra shares rise 4% on RBI nod to Zurich Insurance buying 70% in Kotak General

Kotak Mahindra shares rise 4% on RBI nod to Zurich Insurance buying 70% in...

Vodafone Idea shares zoom 14% today; key technical levels to watch out for

Vodafone Idea shares zoom 14% today; key technical levels to watch out for Vodafone Idea...

Nadeem Amin is the New President for Netstal Americas

Nadeem Amin is the New President for Netstal Americas Netstal appoints Nadeem Amin as its...