RoC to investigate Subhiksha's books

The Registrar of Companies (RoC) will begin an investigation of Subhiksha Trading Services’ books in the next two days. The RoC is waiting for an order from the Ministry of Corporate Affairs (MCA) to initiate the inquiry.

According to sources in the RoC , the investigation “will be” held under Section 209(A) of the Companies Act against Subhiksha. ICICI Venture, which has a 23 per cent stake in the troubled retailer, was asking the RoC to conduct an inquiry on its books.

Subhiksha currently has a debt burden of around Rs 750 crore and is looking for a cash infusion of around Rs 300 crore to restart its business. The company is now in the process of Corporate Debt Restructuring (CDR).

ICICI Venture, which has an exposure of around Rs 106 crore in the retail company, has asked the Chennai RoC to conduct an investigation into the affairs of Subhiksha from April 2007 onwards. The company has also sought an independent audit of Subhiksha for the said period.

Meanwhile, the Madras High Court is likely to open this week a sealed cover, which contains Subhiksha’s financial records. The retailer submitted its financial records to the Madras High Court on May 20 to comply with the court’s earlier order. On April 27, the Madras High Court had passed an interim order staying the appointment of a provisional liquidator (PL). In the same order, which was in favour of Subhiksha, the court directed the retail chain to submit all the accounts on or before May 20, 2009.

The records, which were submitted, included balance sheets for three years starting from 2006-07, financial details from April 1, 2008 in an electronic format, list of assets and liabilities, list of banks in which the company has accounts and 15 banks’ statements.