1. DRT directs J P Morgan Bank not to disburse $ 40 mn to Vijay Mallya

DRT directs J P Morgan Bank not to disburse $ 40 mn to Vijay Mallya

In another blow to beleaguered businessman Vijay Mallya, the Debt Recovery Tribunal (DRT) today directed New-York based J P Morgan Bank rpt J P Morgan Bank not to disburse to him $ 40 million of the $ 75 million sweetheart deal struck between him and Diageo PLC.

By: | Updated: May 17, 2016 10:04 PM
vijay mallya DRT Presiding Officer Benakanahalli also directed companies including Watson Limited, a Mallya-affiliated firm, to attach shares before the Tribunal. (Express Photo)

In another blow to beleaguered businessman Vijay Mallya, the Debt Recovery Tribunal (DRT) today directed New-York based J P Morgan Bank rpt J P Morgan Bank not to disburse to him $ 40 million of the $ 75 million sweetheart deal struck between him and Diageo PLC.

During the proceedings, the DRT also took the bankers to task for not exercising due deligence and take appropriate action to prevent Mallya from receiving $ 40 million.

In tandem, the Tribunal also directed New York-based JP Morgan Bank to “attach” (submit) before it the statements of account held by Mallya in the bank there.

DRT Presiding Officer Benakanahalli also directed companies including Watson Limited, a Mallya-affiliated firm, to attach shares before the tribunal.

The directions until further orders came during the hearing on two applications filed by the consortium of banks led by SBI.

The consortium had prayed for directions from the Tribunal not to disburse $ 40 million of the $ 75 million severance package deal arrived at between Diageo and Mallya and to ask JP Morgan Bank to attach before DRT statements of the account held by Mallya in their bank.

The banks also sought attachment of shares of companies  including Watson Limited, a Mallya-affiliated firm, before the Tribunal.

Diageo, the world’s largest spirits maker, which acquired  control of United Spirits (USL) in 2012, had issued a guarantee to Standard Chartered Bank for a $ 135 million  (around Rs 900 crore) loan to Watson to release certain UBL  shares that were to be acquired as part of the deal.

The company, in their statement, had said that the risk had arisen due to default by Watson in May and DRT preventing sale or any other transfer of such UBL shares in June as part of the enforcement process pending further orders following  petition by bankers.

Pulling up the banks, Benakanahalli said, “My question is I will do it, but what were the banks doing to take due deligence of taking appropriate action to know the details of transaction being done between the two parties, which everybody knew, even prior to arriving at sweetheart deal.

“What were the banks doing? Are you not supposed to pester him (Mallya) and find out where he has deposited the money; where it was received – things like that,” he said.

Tags: Vijay Mallya
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