Bain Capital drags Lilliput to court

When PE investors TPG and Bain Capital had accused Lilliput Founder

Sanjiv Narula of fudging company accounts, Narula had dragged the investors to Delhi High Court alleging that it was the investors’ plan to stall company’s fund raising plans to gain majority control. This time its Bain Capital’s has approached the Delhi High Court, accusing Lilliput Kids of interfering in the auditing of its allegedly doctored company accounts by a court-appointed independent auditing firm, SS Kothari Mehta & Co.

SS Kothari Mehta & Co has recently withdrawn from the audit proceedings citing its inability to complete the auditing due to non-cooperation from the company. In its interim report on February 17, the firm stated that Lilliput has instructed lender ICICI Bank not to provide statements of accounts to the auditors directly.

AZB & Partners, the law firm representing Bain Capital, has now appealed to the Delhi High Court to enable SS Kothari to directly obtain financial information from any third party, including the banks, to complete the auditing process. Bain Capital, in its application said that Lilliput’s action amounts to contempt of court and it had no option, but to approach the court again.

Tata Capital and Taiwan-based China Trust Commercial Bank have also filed separate winding up petitions in the court in a bid to recover their dues from the troubled retailer.