SFIO probes fund diversions by Kingfisher Airlines

By: |
New Delhi | September 15, 2015 9:42 PM

In fresh troubles for Vijay Mallya-led UB Group, the Serious Fraud Investigation Office (SFIO) is probing alleged fund diversions by the long-grounded Kingfisher Airlines...

Kingfisher airlinesIn a BSE filing this evening, United Spirits confirmed that the SFIO has sought information from the company about alleged fund diversions by Kingfisher Airlines. (Reuters)

In fresh troubles for Vijay Mallya-led UB Group, the Serious Fraud Investigation Office (SFIO) is probing alleged fund diversions by the long-grounded Kingfisher Airlines to other group firms and has sought details from United Spirits in this regard.

Once a flagship firm of Mallya group, United Spirits Ltd (USL) is now controlled by British liquor giant Diageo.

In a BSE filing this evening, United Spirits confirmed that the SFIO has sought information from the company about alleged fund diversions by Kingfisher Airlines.

USL said it has received a letter from SFIO in connection with its investigation into Kingfisher Airlines.

“The SFIO noted that the company had conducted an inquiry wherein possible fund diversions were identified and requested some information from the company in relation to that,” the filing said.

Without disclosing specific details, United Spirits said it was cooperating with the authorities in providing the required information.

The domestic liquor maker’s filing came in response to clarification sought by the BSE about reports that SFIO was probing flow of funds between Kingfisher Airlines and some other group companies, including United Spirits.

Going by reports, the amount involved is estimated to be worth thousands of crores.

Faced with mounting debt and operational woes, Kingfisher Airlines was grounded in late 2012. The carrier had accumulated losses of Rs 16,023 crore, while its networth fell to a negative Rs 12,919 crore at end of March 2013.

United Spirits had also come under the scanner of multiple regulators amid allegations of fund diversion from USL to some UB Group companies, between 2010-2013.

Earlier this year, a major boardroom battle erupted with USL’s board demanding ouster of its chairman Vijay Mallya, whose UB Group had sold controlling stake in the company to Diageo.

Shares of United Spirits fell 1.65 per cent to Rs 3,205.95 on the BSE.

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