Koovs PLC (LON:KOOV) shares were shredded on Monday after India’s central bank forcibly delayed an investment by the company’s largest shareholder, Indian retail giant Future Group.
The online clothing retailer, where former ASOS chairman Lord Waheed Alli is chair, said the Reserve Bank of India (RBI) had requested Future reapply for approval of a £6.8mln share subscription in Koovs after having only subscribed for around £250,000 worth of shares.
READ: Koovs shares rocket as Indian retail group subscribes for 29.9% stake
While Future said it was seeking fresh approval from the RBI to continue the subscription, Koovs won’t receive any more cash from the group until this is granted.
As a result, Koovs, which calls itself "the western fashion experts for online Indian consumers", said it was now “uncertain” that the investment would be completed before the end of the year as originally planned, but insisted it still had enough cash in the bank to continue operating for the rest of the calendar year.
This provided little comfort to shareholders as the stock tanked 30% to 3.6p in early trading.
The company originally unveiled the investment agreement with Future in July, agreeing that the group would purchase a stake of up to 29.9%.
Future Group is the largest retail consortium in India and owns over 60 brands and operates around 2,000 retail stores.