VIJAY Mallya, the Indian businessman and former owner of Scottish whisky distiller Whyte & Mackay is at the centre of a civil court claim of up to £140m by drinks giant Diageo which has told him to hand back half of the £53m paid to him in a severance agreement.

Diageo has confirmed that court actions have started as Diageo pursue Mr Mallya and others to recover £140m in funds it said were diverted from its subsidiary United Spirits Ltd (USL) while under Mr Mallya's control and while Whyte and Mackay was part of its stable of drinks brands.

The move to demand the return £28 million already paid to him as part of a severance package was a result of a "violation" of their agreement, Diageo said.

Last year it was confirmed severance payments to Mr Mallya, once nicknamed 'the Branson of Bangalore', had been stopped after a court ruled in favour of a group of creditor banks who argued they had the "first right" to the money after being left out of pocket.

The Herald:

Diageo confirmed it had stopped the first payment of £5 million a year to Mr Mallya at the beginning of this year as part of the deal but had already paid him £28 million up front.

Indian courts had wanted to use all the billionaire tycoon's severance pay to repay a consortium of banks and creditors over unpaid debts of more than £700m owed after his now-defunct Kingfisher Airlines went bust.

Kingfisher, which stopped flying more than three years ago, had £1bn in debts as of September 2013, according to corporate filings from the time.

Diageo ruled out the future instalments to him, saying "it was not liable to pay such amount." and wanted all the money they have paid back.

"Diageo and other group companies have demanded from Mallya the repayment of £28 million which was paid by Diageo on 25 February 2016, and also sought compensation from him for various losses incurred by the relevant members of the Diageo group on account of the breaches committed by him," Diageo said in financial papers.

"While the first instalment would have become due on 25 February 2017, owing to various reasons, including breaches of several provisions of the [severance] agreement committed by Mallya, Diageo believes that it was not liable to pay such amount, and is very unlikely to become liable to pay future instalments, to Mallya."

Diageo had originally agreed to pay Mr Mallya, a billionaire fond of mullet haircuts, diamond earrings, sports and lavish parties, the £53 million as part of his settlement as he resigned as chairman of USL while under intense pressure to quit for almost a year after auditors raised allegations of "impropriety and legal violations" at the drink giant's subsidiary.

The allegations centred on claims funds had been improperly transferred to other businesses run by Mr Mallya, including his struggling Kingfisher Airlines.

In a notice to the Bombay Stock Exchange, USL said that a detailed forensic investigation had revealed improper transactions in which £140m were diverted to overseas and Indian entities associated with Mr Mallya from 2010 to 2014, before Diageo took control of the company.

They included Force One India, Mr Mallya's Formula One racing team, Kingfisher Airlines, and several other companies.

Diageo has now said: "The USL board... directed that USL should conduct a detailed review of each indicated case of fund diversion to assess its legal position and then take such action as is necessary to recover its funds from the relevant parties and individuals, to the extent possible.

"USL has, pursuant to a detailed review of each case of such fund diversion and after obtaining expert legal advice, where appropriate, filed civil suits for recovery of funds from certain parties, including Dr Mallya, before the relevant courts.

Mr Mallya led USL to buy Whyte And Mackay for £600 million in 2007, but USL was forced to sell Whyte and Mackay for antitrust reasons seven years later for £430m following a move by rival Diageo to buy a controlling stake in the Indian spirits maker.

Dubbed 'the king of the good times' Mr Mallya left India and has been accused of hiding in Britain faced with pressure over the debts. He has previously denied absconding from his home country and that he would "comply" with the law.

He said last year that he was in talks with banks for a one-time settlement of Kingfisher's debt, adding that he had no plans to run away from his creditors.