The board of United Breweries (UBL) had restrained Vijay Mallya, the non-executive chairman, from holding any position in the company following an order passed by Sebi in January. The position has remained vacant since then.
The board of United Breweries (UBL) had restrained Vijay Mallya, the non-executive chairman, from holding any position in the company following an order passed by Sebi in January. The position has remained vacant since then. A statement on the UBL website read, “Pursuant to an order dated January 25, 2017, passed by the Securities and Exchange Board of India (Sebi), Vijay Mallya, non-executive chairman, is…restrained from holding the position as director or key managerial personnel of any listed company with effect from the date of the said order. Consequently, the board of directors of the company had resolved not to send notice/agenda and other privileged information to Mallya and requested him to step down from the board. As the Sebi order has neither been stayed nor quashed as on date, Mallya continues to be restrained from being on the board as per the said order.”
This was also communicated to the stock exchanges in February this year. UBL, once again in its board meeting on August 10, observed that Sebi has authorised filing of the requisite forms/intimations with the registrar of companies and other authorities notifying Vijay Mallya’s cessation from holding the position of director in the company.
UBL, the maker of Kingfisher beer, is a joint venture between Vijay Mallya and Heineken. According to the company’s latest shareholding pattern, Mallya and his associate companies hold a 29.46% stake, of which 45.17% of the shares have been pledged. On the other hand, Heineken holds a 43.88% stake.
Under the agreement between Vijay Mallya and Heineken, the former is entitled to remain chairman for life, but this position becomes untenable given the Sebi’s order barring him from holding any position in any listed company. In the current UBL board, the long standing veterans of the company include AK Ravi Nedungadi and Shekhar Ramamurthy.
Mallya left India for the UK in 2016 amidst developments of non-payment of loans to various banks. He had taken loans under various companies to the tune of Rs 9,000 crore. He also faces charges of financial fraud and the government is making efforts to extradite him from the UK, which has been unsuccessful so far.
Earlier, there were reports that Heineken is keen on further increasing its stake in UBL to take complete control of the company on similar lines of Diageo in United Spirits.