Azim Premji Subhiksha

 

Azim Premji Subhiksha

Azim Premji is the Indian Billionaire Business tycoon and the chairman of WIPRO Technologies. Forbes has estimated his net worth US $ 17.5 Billion making him India’s second richest person after Mukesh Ambani.

In September 2008, Azim Premji bought 10% stake in Subhiksha Company, the food and grocery retailer.

This transaction was done by Premji’s personal investment entity Zash Investments Ltd. The stake was bought from ICICI Ventures, a private equity arm of ICICI Bank, sources said. Subhikha Managing Director R Subramanian was not available for comment.

Trouble for Subhiksha began in late 2008 when the company ran out of cash, bringing its operations to a standstill. Subhiksha faced severe financial crises pertaining to liquidity. The cash shortage eventually resulted in Subhiksha closing its nationwide network of 1,600 supermarket stores, and defaulting on loans, vendor payments and staff salaries. The overextended chain imploded and all stores across the country were shut down, most likely never to open again.

Azim Premji said that, “Subhiksha was a retail equivalent of Satyam - India's largest corporate fraud. He said, "There was an overstatement of accounts, fake inventory, fake bills, fake companies that money was transferred to.”

After that Subhiksha takes Azim Premji to court in October 2010 for his above comments in media and damaging its brand image.

Subhiksha has filed a criminal case against Azim Premji for an interview that he had given in a newspaper in which he had said that Subhiksha was unfortunate, adding that it was a retail equivalent of Satyam, and an out and out fraud.