HDFC Bank against vote on Space Mantra's Future Retail Ltd offer
HDFC Bank, a debtholder of bankrupt Future Retail Ltd (FRL), has objected to a decision by the resolution professional (RP) to put to vote Space Mantra's offer for the asset, saying the "resolution plan suffers from gross illegalities".
It said in a letter to verified lenders that there are procedural lapses in the resolution process and the RP had failed in his duty to maximise value for financial creditors. ET has seen the letter.
Deloitte-backed RP Vijaykumar Iyer had invited lenders to start voting on Space Mantra's ₹550 crore resolution plan for FRL from August 31, as reported by ET on Thursday.
HDFC Bank's August 29 letter said the RP did not provide critical information to the committee of creditors (CoC) to allow them to make an informed commercial decision on the resolution.
The RP and HDFC Bank did not respond to ET's queries.
FRL, once owned by Kishore Biyani, operated 1,308 retail stores under the Big Bazaar, Easyday and Foodhall names as per the FY21 annual report.
When corporate insolvency commenced, only 302 stores formed part of FRL's assets.
Of this, the RP did not have access to 228 stores. The RP was able to vacate only 16 stores and made no effort to retain stores from lessors or owners as assets of FRL on the commencement of corporate insolvency, according to the HDFC Bank letter.
The private lender alleged substantial inventory comprising electronic goods, home furnishing and garments were stored in Mumbai warehouses but despite the lapse of a year, the RP hadn't updated lenders on the status of this.
HDFC Bank alleged that Reliance (Industries) provided the RP assets and inventory purportedly worth ₹197 crore kept in 787 stores that was shifted to 50 large stores and warehouses of FRL.
