Three days after Vijay Mallya stepped down from the board of Mangalore Chemicals and Fertilizers (MCF), which he also led as chairman, the company on Thursday announced the appointment of his stepmother Ritu Mallya as a director on its board.
The move comes amid indications that Mallya and Adventz Group chief, Saroj Poddar, are working on restructuring the company’s board and that this would likely see Kolkata-based Adventz get representation on the board.
“Mangalore Chemicals & Fertilizers has informed BSE that the company’s Board of Directors has appointed Ritu Mallya as a Director of the company with immediate effect,” said a company update on Thursday.
The MCF board currently has five other directors. These include UB Group nominee SR Gupte, the company’s managing director Deepak Anand, wholetime director Prabhakar Rao who is the company’s director (works) and two independent directors, Pratap Narayan and Srinivasulu Reddy Magunta. Narayan is a former director-general of the Fertiliser Association of India while Magunta is a former Lok Sabha member and chairman of Balaji Group of Industries, which has business interests in steel manufacturing, distilleries, entertainment, packaging, spirits, real estate, services and energy.
Mallya’s sudden resignation on Monday, without citing any reason, is being attributed to pressure from banks that have been trying to recover loans from his grounded carrier, Kingfisher Airlines. Mallya’s presence on the MCF board would likely have impaired the fertiliser company’s ability to borrow for its working capital needs. However, on the same day that he resigned from MCF, the ministry of corporate affairs rejected the airline’s application to re-appoint Mallya as managing director.
Moreover, the twin setbacks were in close succession to another jolt the flamboyant businessman faced at United Spirits (USL), the liquor firm where he is a co-promoter. Shareholders of USL last week voted against contracts between the liquor firm and entities linked to his UB Group.
Kingfisher Airlines and three of its directors, including Mallya, were declared wilful defaulters by United Bank of India a few months ago. The airline has, however, challenged the bank’s decision in court and obtained a stay. However, United Bank’s executive director Deepak Narang recently said the bank has also identified United Breweries Holdings (UBHL), the parent company of Mallya’s UB Group, as a wilful defaulter.
Gupte, who was previously also on the board of Kingfisher Airlines, was among the carrier’s three directors who were named as wilful defaulters by United Bank of India.
Mallya had teamed up with Poddar to thwart a takeover attempt of the fertiliser company by Pune-based Deepak Fertilisers. They together control 38.44% compared with Deepak Fertiliser’s 31.25%. An agreement between UB and Adventz ahead of their counter open offer had said that Adventz will be entitled to a board seat in the fertiliser firm if the offer succeeds.