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Business News/ Companies / USL to review every fund diversion to Vijay Mallya-linked entities
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USL to review every fund diversion to Vijay Mallya-linked entities

USL's probe to examine transactions worth Rs1,225.3 crore to Vijay Mallya's Kingfishers Airlines and Force India Formula One team, among others

Former USL chairman Vijay Mallya. Photo: MintPremium
Former USL chairman Vijay Mallya. Photo: Mint

Diageo-owned United Spirits Ltd (USL) is undertaking a “detailed review" of each case of fund diversions and improper transactions worth Rs1,225.3 crore involving entities linked to embattled ex-chairman Vijay Mallya, including Kingfisher Airlines and his Formula One team, to assess its legal position to recover them.

In July this year, USL had made it clear that an earlier settlement reached with Mallya would not absolve him of the claims arising out of the new findings of an internal inquiry.

“In connection with the recovery of funds that are prima facie identified by the additional inquiry to have been diverted from the company, the company is in the process of undertaking a detailed review of each case of fund diversion to assess the company’s legal position and then take such action necessary to recover the funds from the relevant parties and individuals, to the extent possible," USL said in a BSE filing.

The firm had stated that the overseas beneficiary or recipients of the diverted funds include entities such as Force India Formula One, Watson Ltd, Continental Administrative Services, Modall Securities Ltd, Ultra Dynamics Ltd and Lombard Wall Corporate Service Inc., “in each of which Dr Mallya appears to have a material, direct and indirect interests". The Indian beneficiaries or recipients of the funds identified by the additional inquiry included, in most cases, Kingfisher Airlines, USL had said then.

Mallya, who has been in the UK for months evading an arrest warrant in India while several banks have declared him a wilful defaulter for non-payment of dues worth over Rs9,000 crore by the now-defunct Kingfisher Airlines, had struck a settlement with USL in February.

Under the deal, he was promised over Rs500 crore to leave the company and was also absolved of any “personal liability" at that time. In its BSE filing on Thursday, the company further said it has taken appropriate action in relation to employees named in the additional inquiry. “In relation to the on-going relationship with counter-parties involved in the improper transactions identified by the additional inquiry, the company has undertaken a detailed review of such relationships and ascertained whether that are entered into on an arms length basis and with appropriate controls and taken appropriate action on the basis of findings," it added.

USL also said it was in the process of reviewing potential non-compliance with applicable laws.

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Published: 27 Oct 2016, 11:10 PM IST
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