United Breweries board wants Vijay Mallya to continue as chairman
08 Sep 2016
Embattled liquor baron Vijay Mallya has got the full backing of the management of United Breweries Ltd to continue as UBL chairman despite being named willful defaulter by creditor banks and the enforcement directorate reportedly attaching his assets, including shares in the beer maker.
The board of directors of UBL, India's largest beer maker, on Wednesday said it wanted Vijay Mallya to continue as chairman of the company despite the Enforcement Directorate (ED) issuing a second attachment order of property worth about Rs6,630 crore against him.
Earlier this week, the agency seized Mallya's farmhouse, flats and FDs in connection with the money laundering case against him and his associates. But the company said as of now, the ED had "not attached" any properties and shares of UBL and Mallya is not disqualified to be the chairman of the company.
"We have looked at every aspect very carefully after Mallya was declared a wilful defaulter. There are no adverse conditions imposed by any statute which debars Mallya from holding a director's position in a listed entity," director Yogendra Pal Chugh, who chaired the company's AGM in the absence of Mallya, said on Wednesday.
Pal also said United Breweries had sought legal opinion from a former chief justice of India on Mallya's continuing as chairman of the company.
The ED made the seizures in connection with the money laundering case against Mallya and his associates, where the liquor baron has been accused of allegedly transferring money from various UB Group entities to now-defunct Kingfisher Airlines.
The ED has so far attached assets worth up to Rs8,041 crore, including assets worth Rs1,411 crore attached a few months ago. United Breweries, known for Kingfisher Beer, recently withheld payments of about Rs1.64 crore to Mallya under directives from the Commissioner of Income Tax and also dividend worth Rs36.6 crore following an order from the Debt Recovery Tribunal (DRT).
The provisional attachment order, issued under the provisions of the Prevention of Money Laundering Act, said it has ordered seizing shares of USL, United Breweries Ltd and McDowell Holding company, jointly held by the liquor baron and UBHL, and his controlled entities, worth Rs3,635 crore.
The ED has also ordered seizure of a farm house in Mandwa in Alibaugh worth Rs25 crore, multiple flats in Kingfisher tower in Bengaluru worth Rs565 crore and Mallya's fixed deposits with a private bank to the tune of Rs10 crore.
The ED claims that Mallya's assets were the "proceeds generated out of criminal activity" of the alleged default of bank loans and that Mallya had "criminally conspired" with Kingfisher Airlines and United Breweries Holdings to obtain funds through the consortium of banks.
Despite all these seizures, the principal debt of Rs4,930.34 crore still remains unpaid.
The ED had recently expanded the probe to include investigation into the alleged default of loan taken from an SBI-led consortium of banks.
The CBI also filed a fresh case against Mallya last month.