New Delhi: The Supreme Court on Friday refused to interfere with the Mumbai High Court order granting interim protection to Future Goup by barring IDBI Trusteeship Services Ltd from invoking pledged shares of Future Retail on behalf of UBS AG till 4 May.
The Mumbai High Court on 30 March had passed this order amid share prices of Future Group companies plummeting because of extreme market volatility due to the Covid-19 pandemic and the restrictions put in place to contain it.
The apex court bench comprising of Justice Sanjay Kishan Kaul and B.R. Gavai dismissed the petition, in a hearing conducted through video conferencing, filed by UBS AG challenging the protection granted by the High Court.
The two judge bench held in their order that since the High Court will be hearing the case on 4 May, the protection granted by the High Court should not be interfered with, as per the Constitution’s provisions.
Senior Advocate K.V. Vishwanathan appeared for petitioner UBS AG and Senior Advocate Mukul Rohatgi appeared for the respondents.
Future group firms—Future Corporate Resources Pvt. Ltd and Rural Fairprice Wholesale Ltd—had petitioned the high court after IDBI Trusteeship Services invoked the pledged shares. Future Corp is the holding company of Rural Fairprice and a promoter shareholder of Future Retail. IDBI Trusteeship had invoked 8% of shares of Future Retail.
There were two trust deeds worth ₹670 crore and the outstanding amount is ₹610 crore. The lender against these trust deeds was UBS AG’s London branch.
The counsels for Future group, Vikram Nankani, argued in the High Court that the stock prices of Future Retail have been tremendously impacted by the current market volatility, due to Covid-19 scare.
The combined impact of debt and Covid-19 panic has led Future group stocks—Future Enterprises, Future Lifestyle Fashion, Future Retail and Future Supply Chain Solutions—to shed 48-68% of their value since the start of the year.
While hearing the plea, Justice K.K. Tated of the High court observed that the difference in price when the trust deed was executed and now due to share market collapse made for a case for granting interim relief.
“Considering the present situation of the market and covid-19, I am of the opinion that the plaintiffs (Future group companies) are required ad-interim protection till next date,” said Justice Tated.
The matter will be heard next on 4 May in the Mumbai High Court.