New Delhi: Fabindia, the well-known Indian lifestyle and apparel retailer, is facing a legal dispute with the Khadi and Village Industries Commission (KVIC) over its subsidiary, Biome Life Sciences. KVIC has filed a lawsuit in the Delhi High Court, alleging that Fabindia failed to honor a “put option” clause in a shareholder agreement.
The clause in question would have allowed the co-founders of Biome Life Sciences, Shantanu Jain and Sania Arora Jain, to sell their 49.99% stake in the company for ₹196.16 crore. KVIC claims Fabindia did not facilitate the exit as per the agreed terms, prompting legal action.
Fabindia, in response, has accused the founders of neglecting their responsibilities and engaging in willful misconduct, asserting that the put option issue was raised only after these alleged lapses. Both parties have appointed retired Supreme Court judges as arbitrators and agreed to take the core dispute to arbitration.
This case underscores the complexities of corporate governance and contractual enforcement within business partnerships. The outcome could have major implications for Fabindia’s operations and its relations with subsidiary companies, highlighting the delicate balance between management and investor rights.