Future Enterprises Ltd. has moved the Bombay High Court against a Mumbai city civil court order restraining it from selling stake in Future Generali India Insurance Co. to its joint venture partner Generali Group.
In January this year, the Future Group had announced plans to sell a 25% stake in its general insurance joint venture Future Generali to its Italy-based joint venture partner Generali Group for Rs 1,252 crore.
IDBI Trusteeship is contesting the stake sale on behalf of Future Enterprises' debenture holders.
On Feb. 25, judge Kishore Jaiswal of the city civil court had passed an ex-parte interim order while hearing a plea filed by IDBI Trusteeship seeking an injunction against Future Enterprises.
I find substance in the argument that if no protection is granted, it would be defeated by the delay. Considering this, till the next date, defendant number 3 (Future Enterprises) is restrained from selling its stake in Future Generali India Insurance Co.Judge Kishore M Jaiswal, Mumbai City Civil Court
IDBI Trusteeship filed the suit to injunct Future Enterprises and others from breach of their obligations under the debenture trust deed and letter of support — between the Trusteeship and the Future Group entities.
According to IDBI, one of the obligations envisaged in the documents relates to Future Enterprises maintaining a certain shareholding in Future Generali. With Future Enterprises looking to sell its stake in Future Generali, IDBI anticipates a breach of this obligation.
This prompted the filing before the city civil court.
Counsels for IDBI Trusteeship had argued that the bondholders had sent several letters to the company but failed to receive any response with regards to the transaction. If no protection is granted, then the debenture holders would bear the brunt of the delay.
Judge Jaiswal found merit in these arguments and proceeded to pass an ex parte order. The matter before the city civil court will come up next on March 10.
The ex parte order will not immediately affect the transaction between Future Enterprises and Generali Group, as the closing date under the transaction document is not due in the near future, Future Enterprises said in an exchange filing, before it challenged the stay order.
The case is expected to come up before the high court on March 4.
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