ICICI Ventures blames Subhiksha for complete operational failure

February 23rd, 2009 - 10:15 pm ICT by IANS  

Mumbai, Feb 23 (IANS) Private equity firm ICICI Ventures, the second largest shareholder of the retail chain Subhiksha, Monday said there was “complete” operational failure at the retail firm, and that it had a fiduciary responsibility towards its own investors.
ICICI Ventures had filed a complaint against Subhiksha Trading Services with the Registrar of Companies (RoC) in Chennai a few days back.

“ICICI ventures has a fiduciary responsibility towards its investors,” chief executive Renuka Ramnath told reporters at a press conference.

Subhiksha, with a debt burden of over Rs.7.5 billion (Rs.750 crore), is looking for a Rs.3 billion (Rs.300 crore) cash infusion to stay afloat.

Ramnath said she does not know the extent of the crisis at Subhiksha and so petitioned the RoC for an independent auditor, amongst other things.

“There has been a complete failure, resulting in an operational and financial loss,” she said.

“We have only 23 percent stake in the company, we will do anything from our side that can be done to salvage the company.”

ICICI ventures has an exposure of about Rs.1.06 billion (Rs.106 crore) in the retail company.

It is engaged in discussions with various lenders and investors to explore options for Subhiksha’s revival, Ramnath said.

The regional provident fund commissioner of Chennai has held Subhiksha managing director R. Subramanian personally liable for non-payment of employees PF and directed him to deposit the outstanding Rs 1.76 crore.

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