USL posts Rs 5,380-cr loss, orders inquiry into Rs 649-cr receivables

Sep 05 2014, 04:58 IST
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SummaryThe 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.

United Spirits (USL), now controlled by UK’s Diageo, on Thursday posted a net loss of Rs 5,380 crore for the March quarter, with provisions amounting to Rs 4,321.63 crore weighing heavy. Most of this was on account of write-offs following the sale of its Scottish subsidiary, Whyte & Mackay, whose proceeds were insufficient to fully repay intra-USL loans.

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

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