VIJAY Mallya, the Indian entrepreneur and former owner of Whyte & Mackay, has come under intense pressure to resign as chairman of United Spirits Limited (USL), the spirits firm majority owned by Diageo.
The board of USL has declared it has lost confidence in Mallya and called for him to step down as a director and chairman of the spirits company, as well as his positions on its subsidiaries.
It comes after an enquiry by USL investigated the relationship between USL and United Beverage Holdings Limited (UNHL), the conglomerate controlled by Mallya which owns Kingfisher beer and, until its demise, Kingfisher Airlines.
A statement released by USL to the Indian Stock Exchange said the enquiry focused on funds "diverted from the company and/or its subsidiaries to certain UB Group companies, including, in particular, Kingfisher Airlines Limited". It covered the period from 2010 to 2013.
USL said that Mallya has indicated he has no plans to step down, noting that it will recommend his removal to shareholders if he does not resign.
The flamboyant businessman is entitled to a seat on the board of USL under a shareholder agreement with Diageo struck when the whisky giant bought its initial 25 per cent shareholding in USL in 2012. The deal is subject to UBHL continuing to hold at least 1,307950 shares in USL and Mallya retaining control of UBHL. It is also subject to the "absence of certain defaults".
Diageo, now the majority shareholder in USL with a 54.78 per cent stake, said it is now reviewing the obligations of the shareholder agreement with Mallya in light of the report
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.Â
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.Â
That is invaluable.Â
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article