Subhiksha submits financial papers to Madras high court

Subhiksha submits financial papers to Madras high court
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First Published: Wed, May 20 2009. 09 40 PM IST
Updated: Wed, May 20 2009. 09 40 PM IST
Chennai/New Delhi: Distressed discount retailer Subhiksha Trading Services Ltd submitted some financial documents to the Madras high court on Wednesday.
These documents included the company’s balance sheets for four fiscals from 2005-06 to 2008-09 and details on its assets and liabilities, said a lawyer represented the firm, who did not want to be named.
The retail firm has shut all its 1,600 stores and is waiting to complete a process to restructure its debts by a group of about 12 banks.
Subhiksha presented the documents after an order from a division bench of the high court that is hearing a petition to liquidate its assets. The petition has been filed by a lender, Kotak Mahindra Bank Ltd, which wants to recover dues worth about Rs40 crore.
The court stayed the appointment of a liquidator provided the retailer submitted financial documents by Wednesday.
Another lawyer, who is representing Kotak Mahindra, said that Subhiksha has submitted some documents with the court. “They filed some papers today...but we have no idea about the content,” lawyer Karthik Seshadri said.
Kotak Mahindra is one of the lenders that together have lent Subhiksha around Rs750 crore. The bank, however, is not part of the consortium that is working on restructuring the distressed firm’s debts.
The country’s largest discount retailer was forced to shut its network of supermarkets across India after founder and managing director R. Subramanian said the company ran out of cash and was unable to keep its operations running.
“These sealed documents will be opened only on 12 June (the scheduled date for the next hearing of the lawsuit). These are not accessible to the public,” the Subhiksha lawyer said. He declined to share details provided in the documents, citing client confidentiality.
In an emailed response to questions sent by Mint asking whether the company shared its financial details with the court on Wednesday, Subramanian said, “We do not comment on matters which are sub judice.”
Subhiksha’s second largest stakeholder, ICICI Venture Funds Management Co. Ltd, and other lenders and even some of the board members have alleged in the past that the company management, which primarily comprises Subramanian, was denying them access to financial details.
Quoting three executives from three banks, Mint reported on 20 May that the company was not letting them and an independent auditor hired by them access its accounts, and hence, they were not able to make any progress on the corporate debt restructuring package.
The lawyer quoted first said that these documents will not be made available to anyone except the court.
The company has filed its balance sheet and profit and loss account statements with India’s Registrar of Companies, which oversees the functioning of firms in the country, only up to March 2007.
According to the profit and loss account of the company for the fiscal year ended 31 March, 2007, its income and net profit were Rs712.54 crore and Rs18.35 crore, respectively, against Rs305.23 crore and Rs10.28 crore, respectively, in the preceding financial year.
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First Published: Wed, May 20 2009. 09 40 PM IST