Bengaluru: United Breweries Ltd (UBL), the maker of Kingfisher beer, late on Wednesday asked Vijay Mallya to step down as non-executive chairman of the company, effective immediately.
The decision was taken at the company’s board meeting on Wednesday.
The Securities and Exchange Board of India (Sebi) had last month barred Mallya and six former United Spirits Ltd executives from accessing the securities market for alleged violations of the listing agreement, diversion of funds and fraud.
Mallya and the others have also been barred from holding directorships in any listed company.
“I am directed by the board to convey that in order to comply with the Sebi order and in the absence of any stay or vacation of the said order, the board is compelled to request you to step down from the board of United Breweries Ltd with immediate effect,” Govind Iyengar, UB’s secretary and senior vice-president, legal, said in an email to Mallya that was filed with BSE on Wednesday.
The board has deliberated this matter and also reviewed the legal opinions in this regard, the company said.
The board had also resolved on 6 February not to send notices and agenda relating to board meetings and/or other privileged information to Mallya till such time as he obtains a stay of the Sebi order, and the same was conveyed to him.
On Wednesday, UBL also reported a 31.94% fall in net profit to Rs48.49 crore for the December quarter. Revenue rose 1.2% to Rs2230.86 crore.
United Breweries said unfavourable market conditions, together with the impact of demonetisation, excise duty increases in several states and raw material price pressures, resulted in a drop in its earnings before interest, tax, depreciation and amortization (Ebitda) and profit after tax in the quarter.
Sales volumes were flat for the nine months ending 31 December 2016 and declined in the western region on a year-to-date basis while growing in almost all other regions.
Input costs continued to be under pressure during the period with price increases in barley and sugar, which were in part offset by “improved efficiencies.”