Flipkart gets stay on insolvency proceedings initiated against it at NCLT

CloudWalker Streaming, a Mumbai-based supplier of LED TVs, alleged Flipkart did not honour a purchase agreement and had not paid dues totalling Rs 26.95 crore.

Online sales platform Flipkart has got a stay order on insolvency proceedings initiated against it at the National Company Law Tribunal (NCLT), in a case involving alleged withholding of dues to a seller.

CloudWalker Streaming, a Mumbai-based supplier of LED TVs, alleged Flipkart did not honour a purchase agreement and had not paid dues totalling Rs 26.95 crore. It petitioned the NCLT bench here that the Insolvency and Bankruptcy Code (IBC) be invoked.

On October 24, accepting the petitioner’s argument, the bench did order initiation of insolvency proceedings. Flipkart appealed to the high court here and, a day later, obtained a stay on the NCLT order, a company spokesperson told Business Standard.

At its next hearing, on October 31, the high court ordered continuation of the stay. The date of the next hearing has not been set yet.

“In view of the above, it is clarified that as on date, Flipkart is not undergoing the corporate insolvency resolution process and is continuing its operations on a going-concern basis, under its present management,” went an e-mailed statement from the company. The matter pertains to an agreement between CloudWalker and Flipkart that dates back to December 2016. CloudWalker sells under a Cloud TV brand. It alleged Flipkart had signed an agreement to purchase stock worth Rs 103.62 crore but only bought goods worth Rs 85.57 crore, and that after much delay.

After receiving two batches of TVs — in January and March 2017 — Flipkart allegedly stopped taking delivery, citing lack of warehousing space. Resulting in unsold inventory piling up with the seller, according to the claims in the order copy dated October 24, posted on the NCLT website.

Business Standard

Owner of Zara, Indiatex to make all its brands available online by 2020

Inditex sells brands including Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho and Uterque across its network of almost 7,500 physical shops.

Inditex, the world's largest clothing retailer and owner of the Zara chain, said on Tuesday it would sell products from all its brands on the Internet around the world by 2020, including in markets where it does not have any stores.

Faced with younger, online-only merchants like Boohoo.com and Missguided, the Spanish company which pioneered the fast-fashion concept in the 1980s is developing new technologies, pairing up with tech firms and testing new ways of handling stock.

Chief Executive Pablo Isla told reporters in Milan that a system whereby online customer orders could be covered with store inventory would be extended to all 96 countries where it has physical stores.

Inditex sells brands including Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho and Uterque across its network of almost 7,500 physical shops. It operates online in 49 markets.

"We want to make our fashion collections available to all our customers, wherever they are in the world," Isla said, quoted in a statement. "Even in those markets which do not currently have our bricks-and-mortar stores."

Online sales jumped 41 percent in 2017 to reach 10 percent of group net sales, although this left it behind some rivals. Sweden's H&M makes close to 12 percent of sales online.

Inditex stock plunged more than 5 percent on the Madrid bourse last week after Morgan Stanley cut its recommendation to "underweight", citing sensitivity to currency movements and shifts in sales channels.

Article Source BS