The war between ailing discount store chain Subhiksha and a key investor hotted up on Tuesday with R. Subramanian, managing director of the company, rubbishing claims by ICICI Venture’s managing director Renuka Ramnath that the firm had not maintained of disclosed its accounts in a proper manner.
But he agreed that some key decisions taken last November by the board on auditing were not implemented.
Subramanian through an e-mail response sent to Hindustan Times refuted ICICI Venture’s claim that no audited results from April 2007 onwards were made available. He also went on to term the whole claim of ‘no financials for 18 months’ as ‘clever representation.’
“The financials up to March 2008 have been audited. Tax returns have been prepared only based on properly audited accounts of March 2008. The claim that we had no audited statements since March 2007 is clearly false,” Subramanian said.
Subramanian also denied that ICICI Venture was not informed about the cash crunch it was facing until the end of September 2008. Linking the fact that Subhiksha got a loan from ICICI Venture towards end of September 2008, Subramanian said, “The fact of liquidity crisis was widely shared both with banks and the financial investors from August-September (2008) onwards.”
He added that ICICI Venture, an equity investor, would not have given the loan at a short notice unless there was a liquidity crisis and that the lender was aware of the liquidity problems then.
The board had directed Subramanian on November 22, 2008 to appoint consulting firm KPMG to carry out an independent review of operations of Subhiksha and to appoint a CFO (chief financial officer) for the retailer.
Another decision was to direct the management to conclude the audit of accounts for the period ended June 2008 at the earliest and in any event on or before December 31, 2008.