SBI Seeks Accountability From Future Group On Stores Taken Over By Reliance Industries
The State Bank of India (SBI) has written to Future Retail Ltd. seeking accountability for stores taken over by Mukesh Ambani-controlled Reliance Industries. SBI sought details on the steps taken by Future Retail group with regard to these stores.
SBI wrote the letter to the Kishore Biyani-founded retailer on April 18. India’s largest lender, SBI, reiterated that the lenders have rights over stock and moveable fixed assets in all the outlets of the company because of the non-payment of dues by the Future Group. SBI wrote in the letter, “You are requested to advise us what steps have been taken by you to safeguard lenders’ interest in this matter.”
Reliance Projects & Property Management Services Ltd. had taken over 835 sub-leased stores of Future Retail after voiding the lease agreements. Reliance started the takeover of Future Group stores on February 25. On March 9, Future Group said in two stock exchange filings it received termination notices on March 7 and March 8 for the stores, which it had sub-leased from Reliance Industries. These included 342 large-format stores including Big Bazaar, Fashion@Big Bazaar, and 493 small outlets like Easy Day and Heritage. Reliance Group also took over 112 Future Lifestyle Fashions Ltd. stores.
After Reliance took over the stores, the Bank of India (BOI) on behalf of the lenders, issued a public notice warning against dealing with Future Group’s assets. BOI is under the ownership of the Ministry of Finance, Government of India. BOI also highlighted that lenders have rights over the group’s assets.
On April 14, Future Retail informed exchanges that BOI had filed an insolvency petition against the company at the National Company Law Tribunal for non-payment of dues that were due under the terms of the Framework Agreement between Future Group and the bank. The takeover of stores by Reliance led to the bankers being concerned about the recovery of their pending dues.