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Business News/ Companies / Karnataka high court admits 6 winding up petitions against UBHL
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Karnataka high court admits 6 winding up petitions against UBHL

UB Holdings informed the BSE that it is in the process of filing an appeal against the high court's order

UB Holdings is the holding company of the United Breweries Group, which consists of the group’s beverages, alcohol, aviation, fertilizer and engineering businesses. Photo: AFPPremium
UB Holdings is the holding company of the United Breweries Group, which consists of the group’s beverages, alcohol, aviation, fertilizer and engineering businesses. Photo: AFP

Mumbai: United Breweries (Holdings) Ltd on Tuesday said the Karnataka high court has admitted six winding up petitions against the company, filed by lenders to Kingfisher Airlines Ltd.

UB Holdings informed the BSE that it is in the process of filing an appeal against the high court’s order. UB Holdings is the holding company of the United Breweries Group, which consists of the group’s beverages, alcohol, aviation, fertilizer and engineering businesses.

Some of the loans given by a State Bank of India-led consortium were backed by corporate guarantees from UB Holdings. Banks, which started recovery measures in early 2013 after Kingfisher defaulted on payments, are now thinking of tagging the airline as a wilful defaulter. The airline has been grounded since October 2012.

On 1 September, the Kolkata-based United Bank of India became the first to label Vijay Mallya, A.K. Ganguly, Subhash Gupte and Ravi Nedungadi as wilful defaulters under Reserve Bank of India (RBI) norms. United Bank has an exposure of around 350 crore to Kingfisher.

On 27 December, the Kolkata high court struck down the United Bank move on technical grounds, since the bank’s grievance redressal cell (GRC) deciding on the proceedings had four members, instead of three, as mandated by the Reserve Bank of India. The bank has now restarted the process of issuing the wilful defaulter tag, according to Deepak Narang, executive director.

“Meantime, we have identified UB Holdings as wilful defaulter and a GRC will be held when chairman for the bank joins," Narang had said.

Under new RBI guidelines issued on 9 September, bankers can take action against guarantors even before exhausting available remedies in a wilful defaulter case.

“Where a banker has made a claim on the guarantor on account of the default made by the principal debtor, the liability of the guarantor is immediate. In case the said guarantor refuses to comply with the demand made by the creditor/banker, despite having sufficient means to make payment of the dues, such guarantor would also be treated as a wilful defaulter," RBI had said.

Kingfisher Airlines owes 6,521 crore to the lender consortium, according to the finance ministry. A few other state-owned banks, including State Bank of India, are also in the process of deciding on the wilful defaulter tag for the airline.

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Published: 06 Jan 2015, 06:08 PM IST
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