ICICI Venture demands independent audit of Subhiksha

By siliconindia   |   Monday, 16 February 2009, 21:51 IST   |    2 Comments
Printer Print Email Email
Bangalore: The Subhiksha saga has taken a new twist with ICICI Venture, one of the key investors in discount retailer firm, writing a letter to the Registrar of Companies (RoC) in Chennai demanding the appointment of an independent auditor to scrutinize the ailing company's accounts, reported Business Standard. ICICI Venture said that Subhiksha has not presented them or the board with the 15-month audited accounts ending June 31, 2008, making them apprehensive of the company's financial stability and health, says government sources. At the same time, differences have developed between ICICI Venture and Subhiksha Managing Director R Subramanian on who are really controlling the company. Subramanian, who holds 59 percent in the company, insisted ICICI Venture has been controlling Subhiksha since 2004 by virtue of its right to appoint a majority of the directors, while ICICI Venture, which holds 23 percent in the retail chain, strongly denied this. Last week, four directors on Subhiksha board resigned. They include Renuka Ramnath, ICICI Venture managing director, Rajiv Bakshi, ICICI Venture joint managing director, and independent directors Rama Bijapurkar, an independent management consultant, and Kannan Srinivasan, professor from Carnegie Mellon. But Subramanian says he is not aware of any letter written by ICICI Venture. "We are not aware of any letter written by anyone to the RoC, and since we run a transparent business we would be more than happy to answer any queries that may be raised by anyone provided the questions are raised of us. Naturally we can't answer questions that are not asked of us," he said. He added that as "an ICICI Venture-controlled company" Subhiksha has complied with all required corporate laws and governance practices so its books have always been clean. "We have been run strictly as per the agenda set for us by ICICI Venture," he added. Strongly refuting Subramanian's claim, an ICICI Venture spokesperson said: "ICICI Venture holds only a 23 percent minority stake in the retail chain. It is the sole responsibility of the managing director of the company, who is also the majority shareholder, to exercise complete control over the day-to-day affairs, including the administration and financials of the company." Meanwhile there are reports that Subramanian had pledged shares with ICICI Venture and other lenders to borrow as much as 205 crore to pay dues to banks last year.