Vijay Mallya Case: Diageo Files Objections Against Tribunal Order, Says Report
Bengaluru: British liquor giant Diageo and two of its subsidiaries on Tuesday filed objections in the Debt Recovery Tribunal here against its last month order barring liquor baron Vijay Mallya from withdrawing a $75 million exit payout by it under a sweetheart deal till the disposal of State Bank of India's case against him over loan default.
After submission of the objection copies by Diageo PLC, Diageo Netherlands and United Spirits Ltd (USL), owned by the UK-based firm, which are among the defendants, DRT Judge Benakanahalli posted the matter for next hearing on April 13.
Other defendants, including Kingfisher Airlines Limited gave an undertaking that they would file objections to the DRT's March 7 order later.
DRT had barred Mr Mallya from withdrawing the $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 Ltd, owned by the UK-based firm, from temporarily disbursing the amount to Mr Mallya, who worked out the deal under a severance package.
DRT had asked Diageo PLC, Diageo Netherlands and USL to furnish details of the termination agreement between them.
The tribunal had also ordered that the amount be attached till the disposal of the original application filed by SBI in 2013.
SBI, which leads the consortium of 17 banks that lent money to the grounded Kingfisher Airlines, had moved DRT here against the airline's chairman Mr Mallya in its bid to recover over Rs 7,000 crore of dues from him.
The state-owned top lender had filed three other applications, including one seeking Mr Mallya's arrest and impounding of his passport, which the judge had said on March 4 would be heard later.
Mr Mallya had to quit as chairman of United Spirits - a company founded by his family in which he sold majority stake to Diageo. Under the deal, that also ended a year-long boardroom battle at United Spirits, Diageo has agreed to pay Mr Mallya $75 million (Rs 515 crore).
Other lenders include Punjab National Bank, Bank of Baroda, Canara Bank, Bank of India, Central Bank of India, Federal Bank, UCO Bank and Dena Bank.
As part of the deal, Diageo said it would pay $40 million immediately to Mr Mallya with the balance being payable in equal installments over the next five years.
It will also absolve Mr Mallya of all liabilities over alleged financial lapses at the company founded by his family.
Mr Mallya, accused of fleeing to London, had told the Supreme Court that he would repay over 40 per cent of his debts by September.
He has failed to appear for questioning by the Enforcement Directorate, which has been investigating his massive debt liability since he left for London earlier this month.
Other defendants before the DRT are United Breweries (Holdings) Limited, Vijay Mallya, Kingfisher Finvest (India) Ltd, SBICAP Trustee Company Ltd, the Commissioner of Service Tax, Unit Trust of India Investment Advisory Services Limited and Standard Chartered Bank.
