The regulator has also cancelled the licences of three packagers providing services to Subhiksha for violating the packaging rules. The warehouses are based in Bhiwandi, which is on the outskirts of Mumbai.
Food and grocery retailer Subhiksha has taken the acquisition route to list its shares on the stock exchanges. The company wants to avoid an initial public offer in view of the turbulence in the capital market.
On February 11, 2009, Subhiksha announced that it was closing down all its 1,600 outlets till May 2009.
Subhiksha Trading, the 11-year-old retail chain which once prided itself on providing value to the shopper, has run out of cash. R Subramanian, 43, managing director of Subhiksha Trading, speaks to Business Standard on the 'pain and continuous struggle' to run even the retail chain's daily operations. Subramanian, however, maintains he is committed to the business and is not ready to walk away.
The Employees' Provident Fund Office in Chennai said it intends to attach the properties of the promoters of struggling retail chain Subhiksha to meet provident fund dues for around 4,500 employees in and around the city.
To take up debt restructuring of cash-strapped retailer.
Subhiksha managing director R Subramnian talks about his adventures, the success of his retail chain and also his future plans.
Retail chain Subhiksha plans to add 200 stores in the country that would create 12,000 jobs within the next few months as it seeks to expand rapidly.
Beleaguered retail chain Subhiksha on Friday said Kotak Mahindra Bank, which had lent Rs 40 crore (Rs 400 million) to it, on Friday objected to merger of the company with city-based Blue Green Constructions and Investments Ltd.
Crisis-ridden retail chain Subhiksha on Thursday said it will explore options to induct more independent directors into the company's board.
ICICI Venture informed Subhiksha on January 8, 2009, about the withdrawal of its nominee directors and asked the company to make the requisite filing with the RoC, Chennai. However, when ICICI Venture did not receive any copies of the filing till January 19, it informed the RoC of the resignations.
Investors ICICI Venture and PremjiInvest as well as a lender of Subhiksha Trading Services have objected to the cash-strapped retailer's merger plan with Chennai-based Blue Green Constructions and Investments, in which it acquired a 40 per cent stake in June last year.
A senior EPFO official said, "(Subhiksha) was given 15 days, starting February 20, to pay the PF dues. Since these were not paid, we will go ahead with the action and set a target to collect the dues before March 31, 2009, when the fiscal year comes to an end." The PF dues to be paid for the June-September period of 2008 were around Rs 1.46 crore. The status of Subhiksha's PF payments in other parts of the country will also be checked.
Recently, IT czar Azim Premji bought a 10 per cent stake in Subhiksha through his personal investment arm for nearly Rs 230 crore, valuing the retailer at Rs 2,300 crore. Premji's firm purchased this stake from ICICI Venture. However, this time around, Subhiksha promoters are expected to issue fresh equity to investors and expect the valuation to be around Rs 3,800 crore, sources said.
Subhiksha, which opened its 1,000th store last month, is on an expansion spree ahead of its initial public offering (IPO). The IPO will take place before March next year. Initially, it aims to invest Rs 300 crore (Rs 3 billion) for funding 500 more stores which are to be opened by June 2008.
Cash-strapped retail chain Subhiksha Trading Services on Monday ruled out declaring bankruptcy and said it may consider selling stake to raise funds as it struggles to arrange Rs 300 crore (Rs 3 billion) to meet immediate operational requirements.
According to lawyers familiar with the development, Premji is yet to reply to the notice. Subramanian neither responded to phone calls nor messages sent to him.
Modern trade retail accounts for 5-6 per cent of the overall sales revenues of FMCG companies. It has been reported in the past that FMCG players like Godrej Consumer Products and Dabur had taken a tough stance against defaulting modern trade retailers and had stopped supplying to them or supplying only in return for cash payment, a deviation from the practice of supplying against credit.
There is pain in the business when you expand and bank credit is difficult to come by. Everybody has to readjust the pace and speed with which they are growing, says R Subramanian.
Retail chain Subhiksha feels it is being unfairly targeted by the Food and Drugs Administration (FDA) of Maharashtra in initiating enquiries and hygiene checks on grounds that it is selling repackaged goods. The company would present its case in a hearing scheduled on August 8.
Want to appoint CFO, advisory board and governance committee.
The investors, which include ICICI Venture, Azim Premji and ICICI Prudential, say that they do not hold more than 38 per cent in the retail company and do not have the requisite shareholding to amend the articles. ICICI Venture, which alone holds 23 per cent stake in Subhiksha, had earlier rubbished claims made by Subramanian that the private equity company 'controls' Subhiksha by virtue of its right to appoint a majority of the directors in the company.
Distressed retailer Subhiksha on Thursday said its 15,000 employees have been unpaid since October last and it has been directed by Employees Provident Fund Organisation (EPFO) to pay the assessed dues at the earliest.
Cash-strapped retail chain Subhiksha on Friday said the ongoing corporate debt restructuring (CDR) process in the company will be over by July and added that law allows a maximum of up to 180 days for completing it.
The Chennai-based retail chain ran out of money several months earlier and has suspended operations since then. Subhiksha's founder-promoter, R Subramanian, said he was optimistic of a settlement and early resumption of operations.
The retailer was forced to shut its network of supermarkets across India due to acute financial crunch.
The company's managing director R Subramanian told PTI in Chennai that the stores would hold products like laptops, printers, computers apart from mobile phones.
Subhiksha Trading Services, the retail chain whose stores have been closed for more than a year for lack of money, is planning to reopen some through a franchise model, say sources.
Cash-strapped retail player Subhiksha has said that almost all its lenders and shareholders are working together to revive the company and it is on its way to completing the ongoing corporate debt restructuring (CDR) programme on schedule by the end of July.
The public spat with private equity firm ICICI Venture notwithstanding, retail chain Subhiksha Managing Director R Subramanian today said they can together bring the firm back on track provided one shareholder is not allowed to force its decisions on the firm.
"We are planning to diversify our business and enter the consumer durables retail market. Our plan is to set up 150 specialised consumer durables stores across the country with an investment of Rs 600 crore by June 2009," Subhiksha Trading Services Managing Director R Subramanian told PTI. He said the consumer durables stores would have a total space of 20 lakh square feet and would be located across 65 cities, including metros and Tier I and II cities.
ICICI Venture, which owns a 23 per cent stake in the beleaguered Subhiksha Trading Services, said its hands "are tied'' as the majority owner and founder of the retail chain, R Subramanian, kept all investors in the dark on the troubles of the company and failed to submit audited financial details.
MCA's southern regional director had earlier recommended inspection of accounts of Subhiksha, alleging mismanagement in the finances of the company. The regional director in a letter to the ministry had suggested that they should order an inspection under Section 209 A of the Companies Act, 1956 as he has received complaints of financial mismanagement in the firm, sources said. Earlier, MCA had sought the opinion of the regional director on this.
The earlier deadline given for a Corporate Debt Restructuring scheme was July 31. According a senior counsel who is close to the development, Cash and Carry has requested for a meeting with secured and unsecured creditors to work out the compromise. C&C was a firm promoted by R Subramanian, promoter and managing director of Subhiksha. Subramanian was not available for a comment and he did not respond to an e-mail sent by Business Standard.
Both are in serious trouble, but the Satyam and Subhiksha cases appear vastly dissimilar in many respects, except for one stunning similarity.
Subhiksha's founder and Managing Director R Subramanian, while refuting the allegations of ICICI Venture, said his company hasn't received any resignations from the nominees of ICICI even though the private equity firm claimed it had withdrawn its nominees.
This transaction was done by Premji's personal investment entity Zash Investments Limited. The stake was bought from ICICI Ventures, a private equity arm of ICICI Bank, sources said. Subhikha Managing Director R Subramanian was not available for comment.
India's highest-ranked table-tennis player looked dazzling on the day and was clad in a golden shirt and veshti.
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