The revival of discount chain Subhiksha could turn out to be a long drawn affair. The retailer's Managing Director R Subramanian, who owns 59 per cent stakes, is in no mood to make way for other investors to name a new head.
Talk of a new management team “is only a lot of useless speculation aimed at distracting focus on the revival,” Subramanian told Hindustan Times by e-mail.
“I cannot leave the system in the lurch till one is sure that the company is back on track and all stakeholders are taken care of adequately.”
All of Subhiksha’s 1,600 stores are closed and 15,000 employees have not been paid salaries since last October. Subramanian received a snub last week from Renuka Ramnath, who heads ICICI Venture, which holds 23 per cent. She said minority investors cannot revive operations without the current chief’s exit. "(It) doesen't look feasible," was what she said when asked if ICICI Venture was comfortable with the current set-up.
ICICI Venture is in talks with Premji Invest, the investment arm of Wipro Chairman Azim Premji, on ways to resurrect Subhiksha with fewer stores.
“There is no question of any greater control ICICI Venture can exercise than presently under the rights they already have and have been exercising,” Subramanian said, adding that ICICI had blocked off direct injection of funds from Premji.
“We were clearly told that we had no choice on taking the money (that flowed from Premji) and we were promised that money would be raised for us in the next few months going forward. All efforts were put on this and it collapsed due to the post-September issues plaguing the financial markets globally and in India,” he said.