Leading private equity player ICICI Venture Fund Management, an arm of ICICI Bank, is holding talks with lenders and investors like Azim Premji for the revival of Subhiksha, the crisis-hit retail chain based in Chennai.

Speaking to reporters in Mumbai yesterday, ICICI Venture managing director Renuka Ramnath said, ''We are minority shareholders and do not have management control. We are talking to lenders and investors like Azim Premji to find a solution. We will support any revival package for the company.''

Subhiksha, with a chain of 1,600 stores across the country ran into serious liquidity crisis around September, but the management had kept the lenders and investors in the dark about the financial position of the company.

ICICI Venture has written to the Registrar of Companies to order an investigation into the affairs of the company for the period after April 2007 and also to appoint auditor to find out the financial position of the company.

Ramnath said she did not know the exact financial status of the company. The management had always maintained that it was doing well and pursuing an aggressive growth path. ''There was no whiff of liquidity crisis facing the company till September,'' she said.

The management, led by R Subramanian, who has a 59-per cent equity stake in the company, approached ICICI Venture at the end of September to help Subhiksha with a Rs50 crore loan to meet short-term liquidity needs.

However, the liquidity problem faced by the company was far more severe than the managing director had represented. The company had started getting legal notices for outstanding payments, and field visits by ICICI Venture showed that the inventories were very low in various stores.

According to Ramnath, it was only in November last that the management admitted that there was a severe liquidity crunch, with mounting debt and unpaid employees and suppliers. ''The Subhiksha board had convened a meeting on 22 November, realising that the financial position of the company was serious. At the meeting, Subhiksha's management was questioned on the financial aspects. And the management, for the first time, admitted that there was a liquidity crunch,'' she said.

The board then appointed KPMG to carry out an independent review of the company and directed the management to conclude the audit of accounts for the period ended June 2008. But the management failed to implement the decisions and KPMG said that it was not able to conduct review due to non-cooperation of the management.

After this, two weeks ago, the two ICICI Venture nominees, joint managing director Rajeev Bakshi and Ramnath, and Rama Bijapurkar, an expert in consumer behaviour, stepped down from the Subhiksha.

Ramnath said ''we would have been more engaging, more understanding if the management had told us about the problems.'' She maintained that the business model followed by the company was sound, being based on controlling costs, and it could work if implemented properly.

While criticising the management for keeping lenders and investors in the dark, she refrained from making allegations like fudging of accounts. ''There is no bad blood between investors and the management,'' she said. She also pointed out that the management had not gone for real estate purchases, and all stores were on lease.