Karnataka High Court tells United Breweries Holdings not to sell assets

Written by fe Bureau | Bangalore | Updated: Jul 23 2013, 21:13pm hrs
Vijay MallyaVijay Mallya (Reuters)
A Karnataka High Court bench on Monday directed United Breweries Holdings (UBHL) not to sell, transfer or part with the possession of the company's assets until further orders on an appeal filed by one of its creditors. The bench passed the directive while hearing an appeal by BNP Paribas against a recent court order that gave permission to United Breweries Holdings (UBHL) to sell shares to British liquor company Diageo Plc.

The bench, which directed the issue of notices to Vijay Mallya, Diageo Plc, Relay BV and Kingfisher Finvest, who were listed as respondents in the appeal, has adjourned the hearing by four weeks.

So far, three appeals challenging the earlier court order have been filed by aircraft lessors and financiers of the grounded Kingfisher Airlines, including two by Rolls Royce and Partners Finance. These companies are among the five petitioners seeking winding up of UBHL.

A May 24 order of the Karnataka High Court allowed UBHL to sell 13.61 million shares in its group company, United Spirits, to Diageo Plc subject to certain conditions such as depositing R250 crore out of the proceeds in the court and not creating new pledges or encumbrances on its assets till the winding up cases were disposed of. The British firm had

completed the purchase of a 25.02% stake in

United Spirits in the month of July.

Two weeks ago, the lenders consortium to the grounded Kingfisher Airlines moved the Karnataka High Court seeking a direction to United Breweries Holdings (UBHL) to

deposit in court the entire proceeds from its stake sale to British liquor firm Diageo Plc.

In a separate hearing on Monday, the court directed the petitioners in the winding-up cases to file their responses to the consortium's petition.

The five winding-up petitions against UBHL had been filed separately between March and November 2012 by Rolls Royce and Partners Finance, BNP Paribas, Avions de Transport Regional GTE and IAE International Aero Engines AG, who were aircraft lessors and financiers to Kingfisher Airlines.