United Breweries can’t nominate independent director to USL board: Diageo
Following a reduction in its shareholding in United Spirits, UBHL is no longer entitled to recommend an independent director
Bangalore/Mumbai: World’s largest spirits maker Diageo Plc said Vijay Mallya-led United Breweries Holdings Ltd (UBHL) is no longer entitled to recommend an independent director to United Spirits Ltd (USL) following a reduction in its shareholding in USL.
Diageo is the majority shareholder in USL with a 54.78% interest and continues to be entitled under the shareholders’ agreement to appoint its nominees to the roles of chief executive officer (CEO) and chief financial officer (CFO) of the company, as well as to nominate and recommend directors to the USL board, Diageo said in a statement.
“Following a reduction in its shareholding in USL, UBHL is no longer entitled to recommend an independent director to the USL board under the shareholders’ agreement between the Diageo group and the UBHL group,” Diageo said.
UBHL remains entitled under the shareholders’ agreement to nominate one director to the USL board, subject to it continuing to hold at least 1.3 million shares in USL and Mallya continuing to control UBHL.
“Diageo’s contractual obligations to support Mallya continuing as non-executive director and chairman of USL are subject to these conditions as well as the absence of certain defaults by UBHL or Mallya,” it said.
Following the annual general meeting on 30 September, USL re-appointed Anand Kripalu (CEO and Diageo-nominated director), Mallya (non-executive director nominated by UBHL) and Sudhakar Rao, D. Sivanandhan and Indu Shahani (independent non-executive directors).
Paul Walsh (non-executive director nominated by Diageo), Ravi Rajagopal (non-executive director nominated by Diageo) and P.A. Murali (CFO and Diageo-nominated director) continued to be on the board of USL.
“Mallya remains UBHL’s nominated director and therefore, in accordance with the terms of the shareholders agreement, Diageo voted in favour of the resolution at the USL AGM to re-appoint Mallya as a director of USL,” it said.
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Business NewsCompaniesNewsUnited Breweries can’t nominate independent director to USL board: Diageo
First Published:1 Oct 2014, 12:45 PM IST
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