McDonald’s row: Logistics partner asked to resume supplies

Meenakshi Verma Ambwani New Delhi | Updated on May 09, 2019



Efforts on to restart operations run by CPRL, says estranged partner Vikram Bakshi

At least a hundred McDonald’s outlets run by Connaught Plaza Restaurants Pvt Ltd (CPRL) face supply constraints, Justice GS Singhvi, the NCLT-appointed administrator on the CPRL board, has written to Radhakrishna Foodland, the logistics partner of the company, to resume supplies.

In his communication to the company, Singhvi has said that discontinuation of supply chain services to CPRL would jeopardise the business directly and is in contravention of the orders passed by the National Company Law Tribunal (NCLT) and tantamount to contempt of the order of NCLT.

With Radhakrishna Foodland Pvt Ltd deciding to discontinue supply chain services, the American fast-food chain’s estranged partner Vikram Bakshi on Tuesday said all possible efforts were being made to restart operations in the restaurants that have faced closure.

Meanwhile, Bakshi told BusinessLine: “We are making all possible efforts to restart operations in these outlets. Since our logistics vendor has decided to hold back products and stocks worth ₹10 crore paid for by us, we are building and creating inventories at an alternative space. We are hopeful that these restaurants will become operational in the next 7-10 days.”

Most of the impacted outlets run by CPRL are located in the eastern region. Radhakrishna Foodland is the sole logistics partner that manages the distribution centres and logistics for McDonald’s restaurants in India. In a letter dated December 20, it informed CPRL about this decision.

When contacted, Balasubramanian Iyer, Chief Operating Officer, Radhakrishna Foodland, told BusinessLine: “We have formally replied to CPRL and we await their response. We have nothing further to add.”

CPRL is a 50:50 joint venture between McDonald’s India and Vikram Bakshi that operates 169 restaurants in the northern and eastern region.

The two partners have been embroiled in a legal tussle since 2013, which is currently being heard in various forums including Delhi High Court, National Company Law Appellate Tribunal and National Company Law Tribunal.

McDonald’s India had decided to terminate its franchise agreement with CPRL in August.

Subsequently, McDonald’s India, in September, had shot off formal letters to CPRL’s suppliers informing them about the termination of its franchise agreement with CPRL and that CPRL is not authorised to operate McDonald’s restaurants. However, Bakshi has continued to operate these restaurants.

Published on December 26, 2017

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