In a move that would further slow down the insolvency proceedings of Future Retail (FRL), the National Company Law Tribunal’s (NCLT) Mumbai bench will hear US e-commerce major Amazon’s appeal on Friday.
In May, Amazon had filed an interlocutory application before the tribunal, asking it not to admit an insolvency petition filed by Bank of India (BoI) against debt-laden FRL.
The bankruptcy court would hear Amazon’s side on why its plea is maintainable before hearing BoI’s insolvency petition. At the NCLT’s hearing today, BoI’s counsel Ravi Kadam also informed the court it would file an injunction to dismiss Amazon’s petition.
In its interlocutory application, Amazon had opposed the initiation of insolvency proceedings, alleging the banks had colluded with FRL and that bankruptcy proceedings at this stage will compromise its rights. The US firm had moved the application under Section 65 of the Insolvency and Bankruptcy Code, which deals with provisions relating to penalty for fraudulent or malicious initiation of proceedings.
Alleging that the banks have colluded with FRL with “mala fide” intentions, Amazon, in its petition had said that if the insolvency procedures against FRL were allowed, there would not be any “accountability” for FRL’s assets. Amazon had also said it will not join the insolvency petition.
The retail giant had also moved the Reserve Bank of India (RBI) earlier, reiterating its earlier demand for a “forensic investigation” into FRL’s alleged misconduct.
BoI, which has an exposure of Rs 1,441.62 crore to the Kishore Biyani-led FRL, had moved the NCLT in mid-April to recover the debt. The total exposure of banks to FRL is estimated to be at about Rs 17,000 crore and the figure could climb to as high as Rs 25,000 crore if debt defaults continue, some of its creditors had earlier informed the court.