The Supreme Court dismissed a special leave petition filed by UBS AG against a Bombay High Court order that restrained IDBI Trusteeship Services from selling shares of Future Retail Ltd. pledged against debentures issued by a group entity.
A two member bench of Justice Sanjay Kaul and Justice BR Gavai said that the Bombay High Court had granted a stay on the sale of shares and will hear the matter on May 4. Considering this, the interim order cannot be interfered with, the apex court said while dismissing the plea filed by UBS AG.
The issue stems from Future Group’s inability to make payments against debentures issued by one of its units. Rural Fairprice Wholesale Ltd., part of the Kishore Biyani-led conglomerate, had issued debentures in 2018 and 2019 to raise money from UBS and other investors. Another group company, Future Corporate Resources Pvt. Ltd., offered shares of the listed Future Retail as a collateral against the debentures.
IDBI Trusteeship, the debenture trustee, issued a notice to Rural Fairprice and the Future Corporate Resources to sell the pledged Future Retail shares after the group defaulted on payments. The Future Group moved the Bombay High Court citing a plunge in share prices after the Covid-19 outbreak. Last month, the Bombay High Court restrained the debenture trustee from selling the shares and posted the matter for hearing on May 4.
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