Catmoss Saga: Sidbi files winding-up petition

Kids’ wear maker Catmoss Retail, which is already

facing audit investigations on the demand of its private equity investor SAIF Partners, has now been slapped with a winding up petition by one of its lenders Small Industries Development Bank of India (Sidbi). It has filed a winding up petition in the Delhi High Court against Catmoss and accused the retailer of "financial mismanagement" and "mismanagement of the company" earlier this month.

The bank has alleged that Catmoss had opted for a loan of Rs 7.5 crores as working capital in July 2010 and the retailer was supposed to repay it by October last. But it has failed to pay any amount to the bank and the cheques issued by Catmoss were dishonoured.

The court issued a notice to Catmoss in its first hearing of the case on January 23, 2013 and the next date of hearing is scheduled for February 28, 2013. The retailer has said to have also defaulted on payments for the last quarter to other lenders including State Bank of India, Union Bank of India, Syndicate Bank, Punjab National Bank and Oriental Bank of Commerce, which have collectively loaned about Rs 90 crores to the company.

SAIF Partners, which invested about Rs 115 crores in the kids’ wear retailer to pick up 34 percent stake, has instructed auditing firm KPMG to study the books of Catmoss after it learnt about supposed wrongdoings within the company.