United Spirits shares sure over 6% intraday after Vijay Mallya quits as chairman

United Spirits shares surged over 5 per cent in the early trade on Friday after it informed stock exchanges that Vijay Mallya has quit as director and chairman of the company

united spirits vijay mallya
USL has an outstanding debt of over Rs 4,000 crore as on March 31, 2016. (Photo: Reuters)

United Spirits shares surged as much as 6.5 per cent intraday on Friday after it informed stock exchanges that Vijay Mallya has quit as director and chairman of the company with effect from February 25, 2016. The company was set up by his family but is now controlled by global liquor giant Diageo.

The share price of the company closed 2.45 per cent up at Rs 2729.85. The scrip opened at Rs 2,800 and touched a high and low of Rs 2835.30 and Rs 2668.40, respectively. in trade. Sensex closed 178.30 points up at 23,154.30

Mallya’s exit from the board of United Spirits (USL) ends a long-drawn tussle between him and Diageo following allegations of irregularities on loans given to UB Group companies.

Following Mallya’s resignation, the board of directors of the company announced that Mahendra Kumar Sharma, independent director and chairman of the audit committee, has been appointed as the chairman of the board with effect from February 25, 2016.

Last year, Diageo had asked Mallya to step down as chairman and director of USL alleging fund diversion to Kingfisher and other UB group entities, a demand he had outrightly rejected.

In the past one year, the share price of United Spirits plunged 20.84 per cent to Rs 2664.65 till Feb 25, whereas the 30-share index Sensex dipped 20.79 per cent during the same period.

For the quarter ended December 2015, United Spirits posted net profit of Rs 40.95 crore, down 45.20 per cent, against Rs 74.73 crore in the corresponding quarter a year ago.

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