DRT likely to rule on Vijay Mallya’s Diageo package today

Zee Media Bureau

New Delhi: The Debt Recovery Tribunal will resume hearing on bankers' plea for securing the first right on the USD 75 million severance package that Mallya had already received for quitting Diageo-owned United Spirits (USL) as its Chairman under a sweetheart deal.

The DRT is likely to take up in the coming days three other applications apart from SBI's for securing the first right on the USD 75 million severance package agreed upon between Vijay Mallya and Diageo Plc.

On April 26, the Supreme Court had asked the Debt Recovery Tribunal (DRT) to "expeditiously decide" within two months, the pleas of banks and financial institutions for recovery of their loans.

The other three applications which the bankers had filed before the Tribunal relate to impounding of Mallya's passport, getting him arrested and getting full disclosure of his assets in the country and abroad.

On April 21, DRT Presiding Officer C R Benakanahalli had posted the matter for next hearing on April 29.

Benakanahalli, while reserving the order on bankers' plea for lenders right on March 4, had said that the other three applications would be heard later.

As DRT commences the hearing on other three applications, Diageo Plc is expected to challenge DRT's power to direct the company to deposit USD 40 million, a part of USD 75 million a payout package signed with Mallya, who is facing a multi-agency probe, including for alleged money laundering.

The consortium led by State Bank of India had filed a memo putting a claim on the payout of USD 40 million to Mallya by Diageo as part of the sweetheart deal.

According to the deal, Diageo agreed to pay Mallya USD 75 million in five instalments in lieu of the liquor baron stepping down from the post of Chairman of United Spirits.

An amount of USD 40 million was paid immediately after Mallya quit from chairman's post.

Diageo had also prayed that the tribunal should reject the bankers' memo for its inconsistent claims on relief.

The banks are expected to counter Mallya-controlled UBHL's claim of Rs 594 crore from them for compensating the losses incurred by them due to the sale of USL equity shares by lenders at 'cheaper rate'.

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

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

With Agency Inputs