IN A relief to a Future Group company, the Bombay High Court restrained IDBI Trusteeship Services Limited and UBS Bank from invoking and selling shares pledged by Rural Fair-price Wholesale Private Ltd (RFWL) in the share market collapse in the wake of the COVID-19 pandemic.
A single bench of Justice K K Tated passed an order in urgent interim plea filed by RFWL and Future Corporate Resources Private Limited (FCRPL) seeking relief in respect of alleged threatened sale of shares pledged by it in January, 2018 and April, last year in favour of IDBI Trusteeship. The Future Group Retail company sought relief in the wake of the market downfall following measures taken by the government to contain COVID-19 outbreak.
Senior Counsels Vikram Nankani and Vineet Naik for Future group companies told the court that their client had outstanding amount payable to IDBI to the tune of Rs 610 crore. In view of this, the Future Group company pledged 8 per cent of its equity shares with a market value of Rs 350 each share on date of transaction.
However, due to present situation of COVID-19 pandemic, the market has collapsed and the market value of each share is below Rs 303, argued Nankani.
He further sought injunction against the IDBI Trusteeship seeking to stop sale of shares during the pandemic period. There was not a single payment default for debentures and substantial amount had been deposited in escrow accounts as security of debentures, argued Nankani and Naik. The bench was told that Future Retails company had assured IDBI of fulfilling financial commitments.
However, IDBI Trusteeship argued that Rs. 610 crore is required to be recovered from Future Group company, while total value of shares as per present market value is not more than Rs. 350 crores and hence the relief need not be granted in respect of selling of pledged shares.
After hearing submissions, the bench observed that when debentures trust deed was executed, the market value of the shares was Rs 350 per share and due to COVID-19 situation, the market collapsed leading the share value to arrive below Rs. 100 each.
Granting interim relief, Justice Tated noted, “Considering the present situation of the market and Covid-19, I am of the opinion that plaintiffs are required ad-interim protection till next date.”
The court posted the matter for further hearing on May 4.
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