Big setback for Vijay Mallya, $40 million Diageo fund out of reach

| Tuesday, May 17, 2016 - 18:37
First Published |

New Delhi: In a big setback for Vijay Mallya, he will not be able to have any access to the $40 million amount that was supposed to be paid to him by liquor giant Diageo.
The Debt Recovery Tribunal (DRT) on Tuesday passed an ex-party order and directed JP Morgan bank in New York to refrain from dispersing the $40 million amount deposited by Diageo in favour of Vijay Mallya (out of $75 million total). Diageo had paid 40 million dollars as the part amount.
The DRT has also directed the bank to provide statement of transaction since 25 February 2016 till date. DRT has also directed the bank to attach shares held by Mallya in companies including Watson Ltd. The petition was filed by consortium of banks led by SBI, seeking the same.
On April 29, this year the DRT had pulled up Diageo for delay in furnishing the details of their agreement with the Mallya and directed it to submit the same on or before May 12.
The Diageo Deal
On February 25, Diageo had signed a settlement agreement with Vijay Mallya and agreed to pay him $75 million in return for his resignation as non-executive chairman of United Spirits, the company built by Mallya. It is noteworthy that Diageo has acquired a majority control in USL (United Spirits Limited). Mallya had also agreed to a non-compete clause for five years across the world except the UK market, according to the reports.
Mallya owes around Rs 9,000 crore including interest to a consortium of banks led by State Bank of India.

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