Top level resignations at Koutons

Koutons Retail the company known for their apparel brand Koutons has received another blow

with the resignation of three more independent directors Vinod Chander Sinha, Girish Chandra Raghubir and Krishnamurthy Santhanam, all citing personal reasons and ill health.  It may be noted that last year three independent directors -- Ajay Mittal, Anil Kathod and Rajeev Grover had resigned the organization. To make matters worse, its chief financial officer Ajay Mahajan, and company secretary Poonam Chahal have also put in their papers.

These departures don’t augur well for Koutons as it struggles in its attempt to raise funds from markets. Koutons was planning to launch a premium brand and shut stores, besides raising Rs 400 crores through a qualified institutional placement or global depository receipts by December last year to improve its finances. The fund raising plans have not yielded any results. They are still grappling with many issues, says a Mumbai-based research analyst.

The issue came up at a recent board meeting where the appointment of KK Katara, Pravesh Ahuja and Rajeev Khandelwal as additional directors (independent) of the company and the appointment of Arun Aggarwal as the CFO and company secretary of the company was considered. The company was also hit by a sharp spurt in the pledging of promoter shares, a decline in the company’s stock prices, and rumors about the default on its bank dues. ICRA had also suspended ratings awarded to Koutons’ fund-based facilities. Meanwhile Koutons Retail India's net sales plunged 59.62 per cent to Rs 108.77 crore sin Q3 December 2010 over Q3 December 2009. The company said that after a careful review, it has decided to write off debtors and advances aggregating Rs. 103.86 crore in Q3 December 2010.