Investors ICICI [Get Quote] Venture and PremjiInvest as well as a lender of Subhiksha Trading Services have objected to the cash-strapped retailer's merger plan with Chennai-based Blue Green Constructions and Investments, in which it acquired a 40 per cent stake in June last year.

The merger is pending approval with the Madras High Court to enable all interested parties to file objections to the merger.

ICICI Venture owns 23 per cent in Subhiksha and PremjiInvest 10 per cent, which it bought from ICICI Venture. Subhiksha Founder and Managing Director R Subramanian, however, maintains that these investors had earlier agreed to the merger.

Subhiksha bought the stake in Blue Green Construction for Rs 2 crore, saying it planned to merge the acquired company with itself and rename the merged entity Subhiksha and list on the Bombay Stock Exchange and National Stock Exchange.

Blue Green Constructions' paid-up capital is Rs 5-crore and the deal was closed without paying the seller any premium.

Subhiksha said it had obtained approvals, including written consent from PremjiInvest and ICICI Venture, for the merger and the proposal was approved unanimously at a shareholder meeting on October, 31, 2008. PremjiInvest officials weren't immediately available for comment and an ICICI Venture spokesperson declined comment.

"We understand that based on requests from some banks to hold the merger in abeyance till the Corporate Debt Restructuring (CDR) process is completed, some stakeholders who have earlier approved the merger have filed objections," Subramanian said, without giving details of when the objections were raised.

"The legality of their objections at this stage after having agreed to the merger will have to be reviewed and decided by the Court during its hearings."

There have been some objections from a few unsecured creditors, which Subramanian claimed are being handled by his lawyers.

At a lenders meeting today, Subramanian said  several lenders were of the view that "stopping the merger may not be in the best interest of the company''. The merger has no bearing on the completion of the CDR, he added.