News Update

Future Retail to insolvency tribunal NCLT dragged by BOI

• ByStartupStory     |    April 16, 2022

Seeking initiation of insolvency proceedings against Future Retail Ltd and a moratorium over the assets of the Kishore Biyani-led debt-ridden firm, public sector lender Bank of India has moved to the National Company Law Tribunal (NCLT). 

The lead banker of a consortium of banks that lent money to Future Retail Ltd (FRL), besides, Bank of India (BOI), also suggested the insolvency tribunal appoint as the interim professional of the company to Vijay Kumar V Iyer.

BOI has said, in its petition that under the payment obligations” of Rs 3,494.56 crore on December 31, 2021, the Future Group has already issued intimation “admitting the default and Rs 5,322.32 crore to its lenders on March 31, 2022.

BOI in its petition copy filed on Wednesday before the Mumbai bench of NCLT, said that the corporate debtor (FRL) was under an obligation to repay certain amounts to the financial creditors and other lenders, under the Framework Agreement, however, the corporate debtor defaulted in making these payments. 

As per the RBI circular, on January 31, 2022, loans given to FRL had already been “downgraded to NPA” with effect from November 30, 2020 in the books of the financial creditors.

To “admit the present application and pass an order for initiating Corporate Insolvency Resolution Process (CIRP)” against FRL has been requested by BOI.

The name of Vijay Kumar V Iyer as an interim professional for the company has also been suggested by the lenders

In terms of the Insolvency & Bankruptcy Code (IBC), BOI has also requested to “declare a moratorium” against the company. 

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