The government run financing organization; The Bank of India has requested the National Company Law Tribunal (NCLT) to initiate proceedings against Future Retail due to their failure to complete paying their dues.
Future Retail then sent a public statement, yesterday on the 14th of April saying that the Bank of India has sent the company a notice on a sect of the bankruptcy and insolvency code which states that a creditor is allowed to inform the central government when a debtor has failed to pay the relevant dues that are owed to them.
The National Company Law Tribunal is a government run judicial organization that handles all cases related to Indian based firms and businesses. The head court is located in the capital of the country- New Delhi.
The case is yet to start and Future Retail has now hired a third-party organization to advise them about the legality of the whole situation and helping them get out of the entire debacle unscathed.
This could not come at a worse time for Future Retail as the company is stuck in another legal battle with US e-commerce behemoths, Amazon, as the company was planning to sell $3.4 billion USD worth of Future Retail’s retail assets.
These are very tumultuous times for the Indian retail conglomerate as their sales, share price, and overall market share seems to be declining every single day. According to Walletinvestor’s calculations and predictions, the share price of Future Retail is set to drop down by 99.968% all the way to Rs. 00985. Currently the share price stands at Rs. 29.75.
Three years ago, Amazon purchased a 49% stake in Future coupons, a subsidiary of Future Retail and therefore the American company inadvertently got a 7.3% stake in Future Retail. There seemed to be a lot clash of opinions between the top brass of both companies and the Delhi High Court got involved in their case. There was impasse in the case and it was transferred to the apex judicial body of the country, the Supreme Court. The case dragged on for a while it was agreed upon by all parties to send the case to the Singapore International Arbitration Centre. The Supreme Court decides to give it another crack and now proceedings are going on between the firms.
Future Retail is now stuck in another legal battle and it seems like the company has dug a hole that is too deep to climb out of. Only time will tell if they will be able to get back to their old glory days.