Vijay Mallya-linked firm moves SC against debt recovery

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Published: July 30, 2019 2:34:29 AM

Liquor baron Vijay Mallya-linked United Breweries Holdings (UBHL) on Monday moved the Supreme Court against a Karnataka high court’s order.

The business tycoon, who is facing extradition proceedings in the UK, said in his appeal against the April 24 order of the Bombay HC.

Liquor baron Vijay Mallya-linked United Breweries Holdings (UBHL) on Monday moved the Supreme Court against a Karnataka high court’s order that allowed the debt recovery officer to sell its 2.8% shareholding, worth Rs 1,025 crore, in beer manufacturer United Breweries (UBL) through private sale in a piecemeal manner.

It said that this piecemeal sale was allowed to proceed despite the owners of properties having filed an application on June 22 making an offer to the HC to sell liquid assets (principally the 26.8% shareholding of UBHL in UBL) to discharge the liabilities of various creditors of the defunct Kingfisher Airlines at a time when the value of assets aggregated to over Rs 13,960 crore (over Rs 14,910 crore as on March 31, 2019).

The Debt Recovery Tribunal in March also transferred the stake — 74,04,932 equity shares — held by United Breweries Holdings to the liquidator.

UBHL said that given the diverse proceedings initiated in different courts across the country under various enactments, including the Companies Act, the Recovery of Debts Due to banks and Financial Institutions Act, the Prevention of Money Laundering Act, and the Fugitive Offenders Act, there is a need for the SC to exercise its over arching power and jurisdiction in larger public interest to pass appropriate orders after consideration of its bonafide offer so as to discharge all bonafide claims of all creditors, including banks, tax authorities, employees, etc.

While UBHL had even proposed a mechanism for the HC to set up a committee headed by a SC judge to ensure and achieve maximum realisation of value of the assets, the piecemeal sale has effectively ensured that any control premium with respect to the 26.8% shareholding standing in the name of the UB group in UBL was lost, the petition stated, adding that this piecemeal sale had caused loss of at least Rs 60 crore (since immediately after the sale the share price of UBL shares increased by 6%).

The UBHL’s appeal comes within days after fugitive businessman Vijay Mallya moved the apex court against the confiscation of his and his relatives’ properties.

A bench led by chief justice Ranjan Gogoi posted Mallya’s appeal for hearing on Friday after senior counsel Fali Nariman argued that UBHL’s appeal has some bearing on the Mallya’s case as well.

The business tycoon, who is facing extradition proceedings in the UK, said in his appeal against the April 24 order of the Bombay HC refusing stay confiscation of his properties by government agencies that he wanted attachment of only those properties which are related to Kingfisher Airlines. He has also questioned the power conferred on the ED under Fugitive Economic Offenders Act, 2018, for confiscation of all properties of a fugitive economic offender without assessing whether or not the properties under confiscation were tainted or part of the alleged proceeds of crime.

An SBI-led consortium of banks had in 2016 filed an appeal seeking recovery of around Rs 9,000 crore from Mallya, who fled India in March 2016 and has been living in the UK since then.

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