The Delhi High Court on Thursday appointed S S Kothari Mehta & Company as the new auditor for Lilliput Kidswear, and asked it to review the company audit earlier carried out by S R Batliboi.
The court also appointed the arbitrator to settle the dispute between Lilliput and its private equity (PE) investors, Bain Capital and TPG. In its earlier hearing, the court had directed that Lilliput’s promoter and PE investors should act in line with the resolution passed by the company board, which involved re-audit of the company’s accounts.
Sanjeev Narula, promoter of Lilliput, had last month approached the Delhi High Court to restrict the PE investors from selling their stake in the company. He had also approached the Company Law Board (CLB) and had, under sections 397 and 398 (oppression and mismanagement), alleged the PE investors, who own 45 per cent stake, obstructed functioning of the company.
According to Narula, both the investors had opposed the company’s initial public offer (IPO) plans. However, the investors who sought a re-audit of the company account, alleged Narula had mismanaged the company. Early this week, the CLB had adjourned hearing on the suit, after which the retailer had moved the Delhi High Court. The CLB had adjourned the hearing to November 8, after the board was informed that Lilliput Kidswear had filed an application in court under the Arbitration Act.
After the board had, in its meeting in September, disapproved Lilliput’s recent financial statements, the PE representatives on the board, along with the auditor of the company and a few independent directors, had resigned from the company.
