Subsidiaries of Gucci and Daiichi go in for voluntary liquidation

Japanese drug maker seeks to wind up India presence; Italian fashion major starts India operations directly with local tie-ups

Two multinational firms, Gucci and Daiichi Sankyo, have decided to send off their Indian subsidiaries for liquidation under the Insolvency and Bankruptcy Code (IBC). 

Earlier, Gucci India Private Limited was a company Gucci intended to operate as a wholly-owned subsidiary in India, but now it would be wound up because the global luxury brand, instead of using the wholly-owned subsidiary, got into local partnerships and started operating in India. This is the reason Gucci India Private Limited applied for voluntary liquidation, a source said.

Gucci will continue to operate through its local partnership. The source said that since Gucci India Private Limited is not a functional entity, it does not show any liability and the liquidation application is to only wind up the entity formally.  

"Gucci India was set up in 2006. We are now streamlining our operations in the market in order to have a more agile organisational structure and will close the company according to Indian corporate law. This decision does not affect Gucci’s ongoing business in India, which continues to operate through another local entity,” a Gucci spokesperson said.

Japanese drug maker Daiichi Sankyo is also winding up its subsidiary Daiichi Sankyo India Pharma Pvt Ltd. A source close to the development stated that Daiichi Sankyo wants to wind up its India set-up once and for all, hence the step towards voluntary liquidation. Since the company was only involved in research and development, there are no liabilities. E-mail sent to the official liquidator remained unanswered.

Japanese drug maker Daiichi Sankyo marked its exit from the Indian market with the closure of its research and development (R&D) establishment in Gurugram earlier this year. 

The company was reviewing its global R&D system with the aim of decreasing R&D operations’ costs and redistributing the resources to further the development of its R&D pipeline.

The company terminated the contracts of its 170 employees. Daiichi Sankyo acquired Ranbaxy's R&D business in 2008 comprising 200 scientists for $4 billion. The company spent 200 billion yen as on October 31, 2016, on R&D. 

Daiichi Sankyo's life science research centre in India conducts researches on respiratory and infectious diseases. 

Daiichi's journey in India wasn't a smooth one. When it entered the Indian market with intent to strengthen its business, various Ranbaxy plants were under the US scanner. Its other research centres — two in Japan and one in Germany — focus on areas such as oncology, heart and kidney. 

Under the IBC, companies that want to wind up can go in for voluntary liquidation. Chapter V of the IBC provides that "a corporate person who intends to liquidate itself voluntarily and has not committed any default may initiate voluntary liquidation proceedings under the provisions of this Chapter”. 

2 multinational firms: Gucci and Daiichi Sankyo, have decided to send off their Indian subsidiaries for liquidation under the Insolvency and Bankruptcy Code

Gucci will continue: To operate through its local partnership

Earlier this year: Daiichi Sankyo marked its exit from the Indian market with the closure of its research and development establishment in Gurugram

170 employees: saw their contracts terminated by the company