Mallya’s statement in full.
By Dileep Thekkethil
Just days after the Punjab National Bank tagged him a wilful defaulter, liquor baron Vijay Mallya has quit the chairmanship of United Spirits – his family liquor business, which is currently operated by the liquor giant Diageo.
Mallya is also planning to migrate to the UK even as the company is facing a fierce battle with lenders, many of whom, including the Punjab National Bank, have tagged Mallya as a ‘wilful defaulter’.
The non-executive director and chairman of audit committee, MK Sharma, will replace Mallya as the chairman.
Diageo agreed to pay Rs. 515 crore (about $75 million) and absolve Mallya of all liabilities over alleged financial lapses at the company founded by his family. Meanwhile, Mallya’s son Siddharth will continue as the Director of USL, which has been sponsoring the IPL for the last two years.
A probe conducted by USL found “various improprieties and legal violations” in providing loans worth Rs 1,337 crore to UB Group firms.
There have been reports about frequent disputes between Mallya and the Diageo group over the payment of the loans given to UB Group companies.
Mallya while addressing the company for the last time as its Chairman “The time has now come for me to move on and end all the publicised allegations and uncertainties about my relationship with Diageo and United Spirits Ltd. Accordingly, I am resigning my position with immediate effect.”
The liquor baron added “I am pleased to have been able to agree on terms with Diageo and USL. The agreement we have reached secures my family legacy.”
Talking about his future plans, Mallya said he has arranged a global 5-year non-compete agreement with Diageo, excluding the United Kingdom. He said, “Having recently turned 60, I have decided to spend more time in England, closer to my children.”
Recently, three major Indian banks – State Bank of India, PNB and United Bank – tagged Mallya and his liquor firm United Breweries Holding’s. Ltd and now defunct Kingfisher Airlines as wilful defaulters. The banks had to take the extreme step after Mallya failed to pay back the loans that he took to run the firms.
Last year, the famous private jet owned by Mallya was sold for scrap by the Mumbai International Airport to recover the amount spent on it.
Earlier this year, a bank consortium headed by SBI decided to auction the Kingfisher House in Mumbai towards recovering a part of Rs. 6963 crore debt owed by Kingfisher.
Mallya, despite all the controversial issues surrounding him, has been busy the whole month selecting the teams for his two franchises – Royal Challengers and Barbados Tridents. Mallya was personally present during the auctioning of the two leagues earlier this month.
The rift between Mallya and Diageo widened after he was asked to resign as the chairman and director of USL. Mallya was accused of fund diversion to Kingfisher and other UB group entities.
Vijay Mallya’s full statement:
“Having recently turned 60, I have decided to spend more time in England, closer to my children.
The time has now come for me to move on and end all the publicised allegations and uncertainties about my relationship with Diageo and United Spirits Limited. Accordingly, I am resigning my position with immediate effect.
I am pleased to have been able to agree terms with Diageo and United Spirits Limited. The agreement we have reached secures my family legacy.
I have agreed a mutual release with both Diageo and United Spirits from claims concerning the alleged irregularities disclosed by USL in April 2015. I am now the Founder Emeritus of United Spirits which recognises my contribution in building United Spirits to what it is today and evokes great emotions and a degree of extreme satisfaction having steered United Spirits from a sales volume of just under 3 million cases to over 120 million cases when control was passed to Diageo.
I fondly remember, as a young boy, launching McDowell’s, which is the largest selling brand in the industry. I also recall the challenges and personal sacrifices in the tumultuous acquisition of Shaw Wallace and the Royal Challenge brand. I feel both happy and satisfied that I helped create United Spirits as a clear market leader in the industry which contributed immensely to the local state economies.
On the sporting front, I will now be the Chief Mentor of the Royal Challengers Bangalore. I have been passionate about this team since inception and am determined to do whatever I can to win the IPL trophy. I am glad that my son, Sidhartha, will remain as a Director as he is equally passionate about RCB.
I have also agreed to a global (excluding United Kingdom) 5 year non-compete arrangement.”
1 Comment
Diageo must deposit the money with the Government of India,for payment of the dues of the Kingfisher Airlines staff and bank loans