Indian banks to start debt recovery proceedings against Future Retail, say sources
Indian lenders are set to initiate debt recovery proceedings against Future Retail
Future, hit by the pandemic, has been struggling to pay off its debt and is fighting a bitter legal battle with U.S retail giant Amazon
Future denies any wrongdoing. But Reliance Industries
State-owned lender Bank of Baroda will be the first to take Future to the Debt Recovery Tribunal (DRT) and is expected to file the paperwork this week, the two bankers said.
“We are taking this step as a measure of last resort because we want to protect ourselves in this legal fiasco,” said one of the bankers directly involved in the matter. “Going to DRT will ensure that Reliance can’t pull another sudden move.”
Other lenders are likely to follow suit, the second banker with knowledge of the matter told Reuters.
Future Retail and BoB did not immediately respond to requests for comment.
Lenders are also likely to subsequently file a case in the National Company Law Tribunal (NCLT) that handles corporate insolvency cases, both bankers told Reuters. Future and Amazon are fighting it out at multiple levels, including at India’s Supreme Court.
Given the legal complexities in this case, approaching the DRT first is likely to help banks attach, seize and sell Future’s assets promptly, instead of going after the entire company at NCLT, Ketan Mukhija, a partner at Link Legal said.
“It is a very strategic, tactical call (by the banks),” he said.