Subhiksha to fight winding-up petitions
27 Feb 2009
Reacting to reports that Tata Teleservices had filed a court petition for the winding-up of Subhiksha Trading Services, R Subramanian, the managing director of the troubled retail chain, yesterday denied that any of its vendors, including FMCG major Hindustan Unilever, Tata Teleservices and HCL Infosystems, have filed any winding up petition against it.
In a statement, he added that any such petition would not stand up in a court of law. "We believe that any such petition filed by them would be without basis in law and would not be sustainable. We will naturally vigorously contest any such petition to ensure that the ends of justice are met and these petitions are defeated," Subramanian said.
Tata Teleservices had allotted some 10,000 connections to various Subhiksha outlets in the country, which were disconnected after the company failed to clear its bills. Tata Teleservices claims it has to recover around Rs10 crore from the discount retail chain.
It added that it is monitoring the situation at Subhiksha, which has been referred for corporate debt restructuring – the system that deals with cases involving several lenders once a loss-making company expresses its inability to pay its dues.
The three major creditors are making all efforts to recover their dues. They are not in favour of a reverse merger proposal, where Subhiksha would be amalgamated with a little-known company called Blue Green Constructions and Investments.
Meanwhile, managing director Subramanian trashed speculation regarding his departure from the company's board, saying he would not "evade or escape" his responsibilities until the corporate debt restructuring process is over.
"As MD of the company, I owe it all to these people...I won't leave them in the lurch and walk out when the business is in trouble. We are not made that way and that liberty is possibly only with those people who are purely financial investors...who have no concern other than the money they make," Subramanian's statement said.
About ICICI Venture's reported interest in gaining control of Subhiksha management, he said there was no question of any greater control by the private equity firm than what it already has.
"We are sure that there are many sensible stakeholders who will work alongside us in the revival of the business, notwithstanding the views of others," Subramanian said. "We have neither time nor energy for any fight. We have to get the business on track, and we are sure they will join the cause, if not now, some time later."
