Even as global spirits major Diageo, which holds a majority stake in India’s largest spirits company United Spirits ...
Even as global spirits major Diageo, which holds a majority stake in India’s largest spirits company United Spirits (USL), is trying to get chairman Vijay Mallya resign from the board, Mallya on Monday said he would continue to chair it.
“I still hold a significant portion of stake in USL and will chair the forthcoming AGM of the company,” Mallya told shareholders at the annual general meeting of United Breweries Holdings Limited (UBHL). Mallya, through his group companies holds 4.09% in USL, while in his individual capacity he owns only a 0.01% stake. Diageo holds a majority stake of 54.78% in the company.
Speaking at the AGM of UBHL, here on Monday, Mallya did not specify when the AGM of USL will be held. The company is yet to file its annual report with the stock exchanges. Mallya said he would also settle cases pertaining to UBHL by end of the current financial year.
He also clarified that the company would soon appoint a new managing director and chief financial officer for UBHL. Both the positions are currently lying vacant. “We have shortlisted a few candidates for the post of CFO and will finalise in a month or thereafter. Also, the managing director position will be filled shortly,” he said.
It may be recalled that in April this year Diageo had asked Mallya to resign from the USL board following allegations of fund diversion from USL to UB Group entities. Mallya had outrightly rejected their demand for his resignation.
Diageo had made the demand at an emergency board meeting on April 25, 2015. The meeting was called to discuss a Pricewater-houseCoopers (PwC) report on allegations of fund diversion worth R3,000 crore from USL by the previous management, led by Mallya, who is the current chairman.
According to a deal with Diageo in November 2012, Mallya was to continue as USL chairman for the next five years. Later, in a statement, United Spirits said its board had lost confidence in Mallya continuing in his role as a director and chairman and therefore the board had asked Mallya to resign forthwith as a director and chairman of the board.
The auditor of UBHL has raised concerns over R8,707 crore of corporate guarantees extended by the holding company to the lenders of Kingfisher Airlines. Auditors Vishnu Ram & Co had also warned that the liabilities of UB
Holdings will rise by R7,730 crore because it has not accounted for several disputed liabilities of the company in its accounts.
When a shareholder pointed out the absence of his son and director Sidhartha V Mallya at the AGM and board meetings and raised doubts over his performance as director, Mallya replied that he himself is still fit and fine.
Sidhartha Mallya, who has completed his term as director, is seeking re-election on the board of UBHL.