Madras HC allows ICICI Bank to recover Rs 221 cr from Subhiksha, guarantors

The Madras High Court has allowed ICICI Bank to recover Rs 221 crore from Subhiksha Trading Services Ltd, the retail chain which was shut in 2008, and its guarantors, including its promoter R Subramanian.

 

Today's order, passed by the Chief Justice of Madras High Court, Justice Vijay Kailash Tahilramani and Justice M Duraiswamy, comes in response to a revision petition filed by Subramanian, managing director, Subhiksha Trading against Debt Recovery Appellate Tribunal (DRAT's) order which allowed the bank to recover Rs 221 crore, from Subhiksha and its guarantors.

 

Confirming the order, V Suresh, counsel for ICICI Bank said that the court dismissed the revision petition and allowed the bank to recover Rs 221 crore, with interest from 2010.

Earlier this year, the Enforcement Directorate (ED) attached the shares and four immovable properties worth Rs 50.02 crore belonging to Subramanian, the then MD of Subhiksha Trading Services Ltd in a bank fraud case under the Prevention of Money Laundering Act (PMLA). The ED said that Subramanian had taken a loan of Rs 790 crore from a consortium of bankers and had not repaid the amount. Subramanian was arrested under the PMLA in February 2018.

 

The case is being heard by DRAT. The ED had taken over the probe in the case based on a CBI FIR and charge sheet.

Subhiksha suspended operations in 2008 after running out of cash and closed around 1600 stores.

In January 2009, Subhiksha approached the banks, which have collectively lent the retailer around Rs 750 crore, to restructure its debt, citing falling demand as a reason for its inability to follow the original repayment schedule. It became the first major retail chain to be referred to the corporate debt restructuring cell.

Subramanian is an alumnus of IIT and IIM, and also a gold medalist. He worked with City Bank, Mumbai and Enfield India for a short spell.

 



Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel