Future Retail’s RP seeks return of ₹839 crore paid to Future Consumer

The resolution professional for Future Retail has filed an application with the National Company Law Tribunal asking for an amount of ₹839 crore paid to group company Future Consumer to be returned.

According to the interlocutory application filed by the RP with the Mumbai bench of NCLT, he has stated that the payments made by Future Retail to Future Consumer during the years FY21 and FY22 should be treated as ‘preferential in nature’ and has sought directions from the court for refund of the payments to Future Retail.

Future Consumer said it was seeking legal advice and taking steps to contest the matter. The company is claiming dues of ₹412 crore from Future Retail, which it has cited as one of its large customers.

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Other major group companies that have made claims on Future Retail are Future Specialty Retail, Future Enterprises and Future Supply Chain Solutions. The last two are also undergoing bankruptcy proceedings. The claims from the four group companies amount to around ₹2,172 crore.

Though it has been defaulting on its debt obligations and made losses for the last four years, Future Consumer has not yet been declared bankrupt. Less than two weeks back, its lead banker, the State Bank of India, initiated a forensic audit of some specific transactions carried out during a particular period and appointed chartered account firm GD Apte to conduct the audit. The time period and specifics of the transactions were not known.

Exchange filings by the company showed that at the end of March, its total financial indebtedness was at ₹452.5 crore. For the nine months ending December 31, 2022, the company lost ₹278.6 crore on revenue of ₹296 crore.

Future Consumer has many fast-moving consumer goods brands, including Golden Harvest and Mother Earth. 

In November last year the company withdrew a merger scheme with three subsidiaries, saying that the terms agreed upon for a one-resolution of its stressed assets with lenders could not be achieved. The company has said it is talking to prospective investors to monetise its assets and use the proceeds to repay its dues to lenders.

In February, the company announced another round of restructuring involving the merger of three subsidiaries with itself. It has also roped in Rajniknat Sabnavis, a former Hindustan Unilever veteran, as an additional non-executive director on its board.