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Diageo Seeks Vacation of Tribunal's Order In Mallya Debt Case

Diageo Seeks Vacation of Tribunal's Order In Mallya Debt Case

Bengaluru: British liquor giant Diageo Plc on Thursday filed an interlocutory application before the Debt Recovery Tribunal seeking vacating of DRT's March 7 order barring liquor baron Vijay Mallya from withdrawing $75 million exit buyout by it under a sweetheart deal till the disposal of SBI's case against him over loan default.

Other two defendants, United Breweries (Holdings) Limited and Kingfisher Airlines Limited also filed interlocutory applications.

UBHL has filed the application for producing evidence and Kingfisher for submitting objections to all the facts pertaining to the case.

After filing of interlocutory applications by Diagio, UBHL and Kingfisher, DRT Presiding Officer Benakanahalli posted the matter for next hearing tomorrow.

The Presiding officer also said since the Supreme Court had ordered DRT to complete the hearing in two months, the hearing of the case will be taken up on a daily basis.

"The Supreme Court, in its order, had directed the Tribunal to complete the hearing in two months time and hence the Tribunal will conduct the hearing on daily basis," Benakanahalli said.

DRT had barred Mr Mallya from withdrawing $75 million exit payment from Diageo till the disposal of the case over the loan default by Kingfisher Airlines.

It had also restrained Diageo and United Spirits Limited, owned by the UK-based firm, from temporarily disbursing the amount to Mallya who worked out the deal under a severance package.

However, a sum of $40 million of the $75 million severance package deal had already been disbursed, following which the bankers' consortium had prayed for directions from the Tribunal to attach the amount before it.

Following a directive of the Tribunal, Diageo submitted the details of severance package deal, in which the bankers figured out that $40 million of the $75 million was parked in the account held by Mr Mallya in the New York-based J P Morgan Bank.

Thereafter, on May 17, the Tribunal directed J P Morgan Bank not to disburse to Mr Mallya $40 million sweetheart deal struck between him and Diageo PLC.

The Tribunal also had directed the bank to "attach" (submit) before it the statements of accounts held by Mr Mallya in the bank.

Benakanahalli also had directed companies including Watson Limited, a Mallya-affiliated firm, to attach shares before the Tribunal.

Diageo, the world's largest spirits maker which acquired control of United Spirits (USL) in 2012, had issued a guarantee to Standard Chartered Bank for around Rs 900 crore loan to Watson to release certain UBL shares that were to be acquired as part of the deal.

The company, in their statement, had said that the risk had arisen due to default by Watson in May and DRT preventing sale or any other transfer of such UBL shares in June as part of the enforcement process pending further orders following the petition by bankers.

Benakanahalli had also pulled up the banks for not taking due deligence of taking appropriate action to know the details of transaction between Diageo and Mr Mallya.

Mr Mallya, whose now-defunct group company Kingfisher Airlines owes over Rs 9,000 crore to 17 banks, had left the country on March 2 and is in the UK.

With Britain recently declining India's request to deport him, government has approached Interpol for issuance of an arrest warrant against Mr Mallya in connection with a money laundering case being probed by ED.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)