The Mumbai bench of the NCLT has allowed the initiation of insolvency proceedings against Kishore Biyani Group company . In April this year, the Bank of India moved the tribunal seeking to initiate insolvency resolution proceedings against FRL, which has defaulted on loan repayments.
Vijay Kumar Iyer has been appointed as the interim resolution professional (IRP) of the company.
NCLT has also rejected the intervention plea filed by Amazon. Amazon had argued that FRL did not honour the Singapore
Emergency Arbitrator’s award of October 2020 and that the lenders could not have entered into a framework agreement with FRL in breach of the award.
The e-retailer had moved the Emergency Arbitrator in Singapore for alleged breach of contract by FRL.
BoI had submitted that the lender’s plea against FRL has no connection with Amazon as the proceedings are in line with the
Reserve Bank of India (RBI) guidelines and the provisions of the Insolvency and Bankruptcy Code (
FRL has defaulted on payment of Rs 5,322.32 crore to its lenders amid the ongoing litigations with Amazon and other related issues.
Future Group’s proposed deal with
Reliance, which was opposed by Amazon, also fell through.
In March, BoI through a public notice claimed its charge over the assets of FRL and warned the public against dealing with assets of the Kishore Biyani-led Future group firm.
BoI is the lead lender for FRL.
In April, in its regulatory filing to the stock exchanges, FRL said 69% of lenders voted against the plan while 30% supported it. As much as 83% of the secured creditors of Future Lifestyle Fashion, the group’s second-largest listed entity, also rejected the proposed sell-off to Reliance.
In 2020, Future Group had decided to combine its two-dozen listed and unlisted companies and sell them on a slump sale basis to rival Reliance Retail for about Rs 25,000 crore as debt ballooned.
The Amazon-Future dispute stems from a 2019 investment by the US giant to acquire 49% in promoter firm Future Coupons Pvt Ltd (FCPL), which owned about 10% of FRL. The US e-commerce major has accused Future Group of breach of contract by agreeing to sell its assets to Reliance, which it said was not allowed under the 2019 investment agreements.
Reliance had taken possession of 835 stores as outstanding rentals had accumulated to about Rs 4,800 crore.
Amazon and the Future Group have filed petitions and counterpetitions over the deal in multiple legal forums. Amazon claims that the terms of its 2019 investment in a Future Retail promoter firm gave it the first right of refusal in any stake sale in the Indian retailer and barred it from selling a stake to Reliance entities.