The recoverability of some of the receivables from debtors, tie-up manufacturers and project- related parties are doubtful and the company has made a provision of Rs 649 crore for this, it said. The claims made in relation to advances to the parties may indicate that all or some of such amounts may have been improperly advanced from the company to such parties for, in turn, being advanced to the alleged UB Group entities. The aforesaid, however, can only be confirmed by a detailed enquiry which has been authorised by the board as mentioned below, the company said while announcing its results.
The board has directed a detailed and expeditious inquiry into this matter and authorised the initiation of suitable action and proceedings as considered appropriate by MD and CEO for recovering the company's dues, USL said, adding that the MD has been directed to engage independent advisors and specialists as required for the inquiry.
The probe will look into pre-existing loans and advances of Rs 1,337.40 crore due from the group's parent company United Breweries Holdings (UBHL). There is also a separate claim from a lender to Kingfisher Airlines demanding repayment of a Rs 200-crore loan, something that the board said came to its notice only in May 2014.
I was a part of the USL board meeting yesterday (Wednesday) so I know exactly what comments were made. There has been a proper inquiry instituted under the charge of the MD and CEO and let the inquiry be conducted and the results will obviously be known, Mallya told reporters after the annual general meeting of group company United Breweries (UBL) in Bangalore.
Earlier this week, Mallya was declared a wilful defaulter by United Bank of India, one of the lenders to the grounded carrier. Asked whether this would impact his position as chairman of USL and UBL, he said: These issues have not been raised with me. As I have said, it is premature to speculate.
Under its new owner Diageo, USL has been reviewing its books and has attempted preliminary enquiries into several prior transactions, which led to a four-month delay in publishing financial results for FY14. Owing to this delay, the National Stock Exchange had recently said it was excluding USL from its indices.
Asked about the Rs 200-crore claim by a lender of Kingfisher Airlines, Mallya said: "There is no question of any liability on the company which is also stated. He added: I don't think that this is an issue between Diageo and UB group and I don't think it should be portrayed as such either. There are certain comments which the auditors have made, which they are obliged to make.
USL's board said the demand by the alleged lender on the basis of agreements executed in December 2011 and January 2012 came to its notice only in May 2014 when it received a letter from the party. The company subsequently examined the documents. The management, based on legal advice received, does not expect any liability or obligation to arise on the company out of these purported agreements, the company said in a note to the financial results.
Asked if UBL's co-promoter Heineken has expressed interest in raising its stake in the beer company further, Mallya said: "Why should these questions arise Do you have reasons to believe that I want to sell and Heineken wants to buy me out It's a rather incredible question."
USL said RBI's circular on wilful defaulters raises uncertainty on the impact of the development on the availability of credit facilities to the company.