The Resolution Professional (RP) of Future Retail Limited (FRL) has filed an application before the NCLT against Kishore Biyani, his brother Rakesh Biyani and eight other entities alleging their involvement in “fraudulent transactions” in the company.

A regulatory filing by Future Retail Ltd (FRL) said, “This application has been filed pursuant to the findings of the report received from Nangia & Co. LLP, which was appointed as the ‘Transaction Review Auditor’ by RP. “

The Transaction Review Auditor was to assist the RP in its duties and determination as to which transactions have been reported under Section 66 of the Code for adjudication by the NCLT.

It added, “The RP of FRL has filed an application before the National Company Law Tribunal, Mumbai against certain persons for avoidance of transaction under the applicable provisions of the Insolvency and Bankruptcy Code 2016.”

According to the disclosure, the estimated amount involved is Rs 40.53 lakh.

An entity Koinonia Coffee Pvt Ltd has also been named in the report.

Under IBC, avoidance transactions are transactions undertaken by a corporate debtor before the commencement of the Corporate Insolvency Resolution Process (CIRP) to defraud its creditors or to benefit related parties as well as its own management.

RP has filed an application under section 66(1) of the Insolvency and Bankruptcy Code (IBC).

The provision says that if during the course of CIRP or liquidation process, it is found that any business of the corporate debtor has been carried on with intent to defraud the creditors of the corporate debtor or for the purpose of any fraud, the NCLT on the application of the RP will take a step can pick up Ordering any person to make such contribution to the property of the corporate debtor as it thinks fit.

The RP of Future Retail Ltd has also approached NCLT seeking a third extension till September 15 to complete the CIRP.

CIRP was initiated against FRL by NCLT on July 20, 2022 following the loan default.

As per Section 12(1) of the Code, the CIRP shall be completed within a period of 180 days from the date of commencement.

However, NCLT can grant one time extension of 90 days. The maximum time to complete the CIRP is 330 days, including any extension or litigation period.

Earlier, FRL had said that it had received six bids from potential buyers till May 15, the last date for submission of resolution plans.

The deadline for submission of resolution plans was May 15, 2023, for the 48 companies that were in the final list of ‘qualified potential resolution applicants’.

(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content was auto-generated from a syndicated feed.)


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