IndiaRetailBiz

Indiabulls Retail, part of Indiabulls group, which operates across infrastructure, real estate, financial services, and power sectors of India, is believed to have been defaulting on outstanding payments to a number of suppliers and service providers.

Indiabulls Retail, it may be recalled, had come in existence after Indiabulls Financial Services had decided to enter the business of modern retail  and had in December, 2007, acquired Piramals’ owned Piramyd Retail for Rs 208 crore. Indiabulls had then planned to set up wholesale business of ‘cash and carry’ format as well. Indiabulls was then, in fact, entering the retail business with a view to leverage on the agroup’s strength in real-estate business. India Retail had then become part of Indiabulls Real Estate (IBREL) Limited.

According to a recent Mint report, Indiabulls Retail is facing a number of vendor complaints against non-payment of outstanding amounts ranging between Rs 6 and Rs 45 lakh. Indiabulls Retail is facing rough weather on other front as well.

As reported earlier, Indiabulls has already shut down a number of its Megamart and Megastore outlets including all stores at Ahmedabad. Most of the Indiabulls outlets were actually operated earlier by Piramyd Retail under the brand names of ‘Megastore (lifestyle- large format) and ‘Trumart’ (convenience, grocery- small format) stores.

Indiabulls is holding “legacy issues” of taking over Piramyd’s business for non-payment of outstandings to vendors. According to Indiabulls a lot of payments have been put on hold because many of such claims are fraudulent. “Some liabilities are recorded and certain liabilities are not recorded. What do you do with the unrecorded liabilities?” asks Anil Lepps, who has recently been appointed as CEO of the retail business.

Lepps, though, concedes that some of the claims may be genuine as well and the company may require some time to clean up the “mess.”

One of the Mumbai-based vendor, requesting anonymity, told the newspaper that he has to receive outstanding amount of Rs 45 lakh. Indiabulls is not in a position to pay because the company, according to his information, is cash starved. “I stopped supplying to them three months ago, but now they are forcing me to resume supplies failing which they say they will withhold my payment,” he said.

It may be noted that Indiabulls while acquiring Piramyd Retail had agreed to take over the company’s liabilties also and, had over a year’s time since transfer of business in December, 2007, to reconcile vendor accounts.

Hindustan Thompson Associates Ltd (also known as JWT), according to sources, has filed a legal case against non payment of Rs 50 lakh for design, production, and release of adververtisement. Indiabulls, though, believes that the claim pertains to advertising work done by the agency for other Piramal Group companies.

Lepps concedes that some claims might be genuine but because of lack of records, it was taking the company a lot of time to sift out the fraudulent cases. “I won’t…say they are all wrong…whatever is genuine is getting reconciled. We are not a fly-by-night operator and we will not keep anybody’s money. Every genuine case will be taken care of,” he said.

Lepps hopes to sort out everything in the next couple of months, says the report.