Court asks Aricent Technology to vacate office premise over rental default
BENGALURU: US headquartered private equity fund Kohlberg Kravis Roberts & Co (KKR) -controlled telecom software solutions firm Aricent Technology has been asked by a local court in Bangalore to vacate the office premise it has been occupying in RMZ Ecozen for defaulting on rental payments for over 11 years.
In an eviction suit filed by Milennia Realtors, a group company of RMZ corp, in the city civil court, Bangalore, Aricent Technologies (earlier known as Flextronics Software Systems) has been ordered to quit and deliver the property RMZ Ecozen at Marthahalli, Sarjapur road, Bangalore by July 13, 2016.
“Total amount to be paid as per the court order by Aricent is around Rs 32 crore,” said the earlier person.
Multiple calls made by ET and a detailed email did not elicit any response from the company.
Aricent which is a global innovation, technology and Outsourcing Company focused exclusively on communication has defaulted on the payment of appropriate rentals to the builder since 2003 and the matter was in court for 11 years. “It occupies 1, 30,000 sq ft office space in RMZ Ecozen and around 1000 employees operate out of this office,” said one of the person familiar with the matter. The lease deed with Aricent commence in November 2003.
Aricent, previously known as Flextronics Software Systems, was spun off from Flextronics in 2006 when KKR had acquired a majority stake in the company for $900 million. In 2009, the worlds largest US-based PE fund has increased its stake from 62.5% to 79% in the Delhi-based telecom software solutions provider, Aricent. KKR and Canada Pension Plan investment board has invested $225 million in the company then.
The court order mentioned, “It is hereby further ordered that the defendant shall pay Rs.18/- per sq.ft per month as damages in respect of use and occupation of the schedule property from 1.2.2005 till he is evicted from the property with interest at 6% p.a”.
The court has also ordered that if the software firm fails to quit and deliver vacant possession of the property within three months from the issue of the order, RMZ will have all the rights to take possession of the same through the process of this Court at the cost of the defendant.
Aricent has centres in Europe and the US , but India continues to be its key delivery centre. The software firm has offices in Gurgaon, Chennai, Hyderabad and Bengaluru and employees around 10,200 people in in India with 1000 abroad.
RMZ Corp is one of the largest commercial real estate developers in the country. It owns 20million sq ft of office space in the country and plans to take it to 80 million sq ft by 2020. The company generates around $200 million of annual net operating income from commercial assets alone. This is expected to grow 30-35% this year.