Diageo Holdings Netherlands files interlocutory application before the Debt Recovery Tribunal

After British liquor giant Diageo Plc, Diageo Holdings Netherlands today filed an interlocutory application before the Debt Recovery Tribunal seeking vacating of DRT's order barring liquor baron Vijay Mallya from withdrawing USD 75 million exit buyout by it under a deal till disposal of SBI's case against him over loan default.

PTI| Last Updated: Jun 03, 2016, 22:10 PM IST
Diageo Holdings Netherlands files interlocutory application before the Debt Recovery Tribunal

Bengaluru: After British liquor giant Diageo Plc, Diageo Holdings Netherlands today filed an interlocutory application before the Debt Recovery Tribunal seeking vacating of DRT's order barring liquor baron Vijay Mallya from withdrawing USD 75 million exit buyout by it under a deal till disposal of SBI's case against him over loan default.

All the parties, including Kingfisher, Diageo Plc and UBHL, pleaded today before the Tribunal to take up their applications on a priority basis.

"The Tribunal will decide which applications should be heard on priority basis and also set a timeline for disposing all the pending applications," DRT Presiding Officer Benakanahalli said and then posted the matter for hearing on June 7.

Yesterday, Diageo Plc had filed the interlocutory application seeking vacating of DRT's March 7 order.

DRT had barred Mallya from withdrawing USD 75 million exit payment from Diageo till the disposal of the case over the loan default by Kingfisher Airlines.

It had restrained Diageo and United Spirits Limited, owned by the UK-based firm, from temporarily disbursing the amount to Mallya who worked out the deal under a severance package.

However, USD 40 million of the USD 75 million severance package deal had already been disbursed, following which the bankers' consortium had sought directions from the Tribunal to attach the amount before it.

Following a directive of the Tribunal, Diageo Plc and its two subsidiaries submitted the details of severance package deal, in which the bankers figured out that USD 40 million of the USD 75 million was parked in the account held by Vijay Mallya in New York-based J P Morgan Bank.

On May 17, DRT directed J P Morgan Bank not to disburse to Mallya USD 40 million and asked it to "attach" (submit) before it statements of accounts held by Mallya in the bank.

On the other hand, Vijay Mallya-controlled United Breweries (Holdings) Limited (UBHL) sought time to submit evidence?and substantiate their claim of Rs 594 crore from bankers for compensating the losses incurred by it due to the sale of USL?equity shares by lenders at cheaper rate.

The bankers had sought DRT direction to ask UBHL to substantiate their claim of Rs 594 crore loss with documents of proof and evidence.

UBHL, in its objections filed in the Tribunal on?April 5, had contended that the lenders sold 26 lakh equity shares of United Spirits Limited (USL) pledged to them?before maturity.

The company, in its objections, had also contended that the?lenders' action of selling the equity shares for Rs 1,836.94 per share, instead of a good price, when the shares hit a high of Rs 4,080 per share in April last year, caused loss to it.

Subsequently, the consortium of banks led by State Bank of India on April 13 filed counter objections to UBHL's claim of Rs 594 crore from them for compensating the losses incurred by it due to the sale of USL equity shares by lenders at 'cheaper rate'.

The bankers also had alleged that the Rs 594-crore claim at this point of time is a clear-cut tactic of UBHL to delay the process of justice, knowing fully well that the case?is on the verge of disposal.

Yesterday, UBHL and Kingfisher Airlines Limited had also filed interlocutory applications.

UBHL had filed the application for producing evidence? pertaining to its claim of Rs 594 crore from bankers for? compensating the losses incurred by it due to the sale of USL equity shares by lenders at 'cheaper rate'.

Kingfisher had filed application for submitting objections to all the facts pertaining to the case.

Mallya, whose now-defunct group company Kingfisher Airlines owes over Rs 9,000 crore (Rs 90 billion) to 17 banks, had left the country on March 2 and is in the UK.

After Britain recently declined India's request to deport him, government has approached Interpol for issuance of an arrest warrant against Mallya in connection with a money laundering case being probed by Enforcement Directorate