Kishore Biyani has resigned as executive chairman and director of Future Retail and his resignation has been placed before the Committee of Creditors, as per the Insolvency and Bankruptcy Code, the company said in an exchange filing.
Biyani’s resignation, dated January 23, was received by the resolution professional on January 24 via email.
“Nothing herein should be construed as an acceptance of the contents of the resignation letter tendered by Kishore Biyani, including in respect of his submissions in the resignation letter on information handover,” the exchange filing said.
Troubles began mounting for Future Retail because of high debt which was compounded by its operations taking a hit due to the Covid-19 induced lockdowns, which impacted its sales and its net worth.
In an exchange filing last year, the company had said the second and third waves of the pandemic had worsened its financial condition and its strained cash flow led to a build up of unpaid dues to vendors and lessors.
In August 2020, the firm announced a scheme of arrangement to sell its retail, logistics, and warehousing businesses to Reliance Retail for Rs 24,713 crore.
After the announcement, the retailer was unable to raise any additional capital and thus remained in default of various commitments.
It had also informed exchanges that many of its lessors had issued termination notices and filed suits for recovery and eviction from properties. After this, the Reliance group had reached out to lessors and signed fresh lease deeds and sub-leased the properties to FRL.
Last February, the Reliance group terminated the leases and took control of hundreds of Future Retail stores.
In April, Reliance Retail said it would not go ahead with the scheme of arrangement with Future Group after secured lenders voted against the scheme.
Following this, in July, the Mumbai Bench of the National Company Law Tribunal (NCLT) admitted Bank of India’s petition to start insolvency proceedings against Future Retail and also appointed an interim resolution professional (IRP). The public sector lender had moved the petition on April 14 for non-payment of dues under the terms of agreement the Future Group entered with it.
In August, Future Retail received claims worth Rs 21,057 crore from 33 creditors.
The Adani group, Reliance Industries and 13 other entities have submitted expressions of interest to acquire the assets of the bankrupt retailer.
Biyani, considered a pioneer of modern retail, entered the Indian market in 1987 with a company called Manz Wear, later renamed Pantaloons. He sold a majority stake in the company to the Aditya Birla Group for Rs 1,600 crore in 2012.