New Delhi: Singapore’s DBS Bank Ltd has filed a winding-up petition against Vishal Retail Ltd in the Delhi high court in a bid to recover money it loaned to the troubled retailer, a person close to the development said.
The petition, filed earlier this week, is the latest in a string of cases DBS has brought in various courts to recover dues of around Rs40 crore from Vishal Retail. DBS Bank has also approached the debt recovery tribunal in New Delhi.
It has filed cases against Vishal Retail alleging that cheques issued by the company had bounced, according to the person quoted above who didn’t want to be named because the cases are pending in court.
Around 40 cheques amounting to about Rs13 crore issued by Vishal Retail to DBS were dishonoured as the retailer had instructed banks to stop payment, the same person said.
Sudeep Bhalla, a spokesman for DBS, declined to comment on “client specific issues”.
“We haven’t received any notice from DBS (about the winding-up petition),” said Arun Gupta, company secretary for Vishal Retail, when reached for comment.
Cash-strapped Vishal Retail is currently undergoing a corporate debt restructuring (CDR) programme and is in talks with US-based private equity firm TPG Capital for selling a stake in the company.
Vishal Retail has said that banks, including State Bank of India, HDFC Bank Ltd and ING Vyasa Bank Ltd, that are part of CDR had given their approval to TPG’s proposal to take over the retailer. DBS Bank is not part of the CDR.
Vishal Retail is the latest in a string of retailers to face winding-up cases after being hurt by the economic downturn and credit crunch that also laid low firms such as Subhiksha Trading Services Ltd and Sankalp Value Retail, which operated the India franchise of US-based My Dollar Store.