Following a reduction in its shareholding in USL, United Breweries (Holdings) Ltd (UBHL), promoted by Mallya, is no longer entitled to recommend an independent director to the USL board, global spirits major Diageo said in a statement. "The composition of the USL board following the annual general meeting reflects this change," it said.
At the AGM of USL held yesterday in Bangalore, Diageo said shareholders of USL approved appointments of CEO Anand Kripalu as a director and Sudhakar Rao, D Sivanandhan and Indu Shahani as independent non-executive directors apart from Mallya's re-appointment.
Diageo said other members of USL board -- Paul Walsh (non-executive director nominated by Diageo), Ravi Rajagopal (non-executive director nominated by Diageo) and P A Murali (CFO and Diageo-nominated director) -- would continue in their respective positions.
UBHL remains entitled under the shareholders agreement to nominate one director to the USL board subject to it continuing to hold at least 1,307,950 shares in USL and Mallya continuing to control UBHL, it said.
"Diageo's contractual obligations to support Mallya continuing as non-executive director and chairman of USL are subject to these conditions as well as the absence of certain defaults by UBHL or Mallya," the statement said.
Mallya remains UBHL's nominated director and therefore, in accordance with the terms of the Shareholders Agreement, Diageo voted in favour of the resolution at the USL AGM to re-appoint Mallya as a director of USL, it said.
Diageo is the majority shareholder in USL with 54.78 per cent interest and continues to be entitled under the shareholders' agreement to appoint its nominees to the roles of CEO and CFO of USL, as well as to nominate and recommend
directors to the USL board, subject to overall composition of the USL board meeting the applicable requirements of Indian law and regulation, the spirits major said.
The world's largest spirits maker Diageo Plc had on November 9, 2012 announced that it would acquire 53.4 per cent stake in United Spirits for Rs 11,166.5 crore in a multi-structured deal.