Kishore Biyani, founder and group CEO of one of India’s biggest brick and mortar retailers, Future Group has moved the Bombay High Court against the forensic audit process of the company.
In August this year, Kishore Biyani and his brother Rakesh Biyani were asked by the Bank of India to respond to the findings made in the forensic audit report by BDO, a forensic auditor appointed by the bank. Bank of India, who is the leading creditor of Future Retail Ltd (FRL) sought representation from the company post the submission of the report by BDO on August 9, over credit facilities availed by Biyani.
“Kishore Biyani – Director of the Company, has filed a writ petition before High Court, Bombay, inter alia challenging the Forensic Audit process, including the Forensic Audit Report dated August 09, 2023, submitted to BOI by BDO India,” FRL said. Following the plea, the corporate insolvency resolution process (CIRP) was initiated against the retail giant. The deadline to complete the CIRP was September 15, the third extension granted by the Mumbai bench of the National Company Law Tribunal (NCLT).
The insolvency proceedings against FRL were started by the tribunal on July 20, 2022. According to media reports, lenders have received only one bid from SpaceMantra, close to the liquidation value of the FRL. The Committee of Creditors of FRL is yet to finalise a decision on the bid.
Furthermore, the Resolution Professional of FRL filed an application against Kishore Biyani, Rakesh Biyani and eight other entities before the NCLT regarding their alleged involvement in a fraudulent transaction in the company estimated at Rs. 40.53 crore. This application “has been filed pursuant to the findings in the report received from Nangia & Co. LLP, which was appointed as ‘Transaction Review Auditor’ by the RP,” FRL had informed in a regulatory filing.
The RP has moved an application under Section 66(1) of the Insolvency & Bankruptcy Code (IBC). The provision states that if, during CIRP or a liquidation process, it is found that any business of the corporate debtor has been carried out with intent to defraud creditors of the corporate debtor or for any fraudulent purpose, the NCLT may on the application of RP, pass an order to any persons to make such contributions to the assets of the corporate debtor as it may deem fit.