USL boss faces losing place on board

Vijay Mallya, the boss of Indian producer United Spirits (USL), may have to quit the company’s board if he is found to be a “wilful defaulter” of debts — a tag some lenders are attempting to put to his name.

USL boss Vijay Mallya, who is challenging banks' attempts to brand him a 'wilful defaulter'

USL boss Vijay Mallya, who is challenging banks’ attempts to brand him a ‘wilful defaulter’ (Photo:Wiki)

Mallya, 58, chairs the board of USL, in which Diageo and Heineken are the major shareholders.

Three lenders – State Bank of India, Punjab National Bank and United Bank of India – have sought to declare Mallya a “wilful defaulter”.

He has already challenged United Bank of India’s move in the court and may follow suit with the other two, reports The Times of India.

Currently the company is yet to release their half-year reports as internal auditors attempt to get to grip’s with the company’s financial arrangements after the recent takeover by Diageo.

It is thought that USL’s inability to explain loans of around 1,400 crore (about £140m) to parent company UB Holdings is one of the major reasons behind the troubled accounts.

This loan was reportedly used to prop up the failing UB Group company Kingfisher Airlines, which is has been grounded since 2012 due to defaults in payments.

“RBI guidelines and Companies Act suggest that a wilful defaulter won’t attract automatic disqualification unless there is criminal conviction,” Shriram Subramanian of InGovern Research Services – a firm that advises large investors on corporate governance – told the newspaper.

“But shareholders and creditors can demand the removal citing the negative business impact it carries,” he continued.

Any company with a wilful defaulter on its board cannot access banks or capital markets for funding needs, which would be disastrous for the stability of a company.

Leave a Reply

Your email address will not be published. Required fields are marked *

Please note that comments are subject to our posting guidelines in accordance with the Defamation Act 2013. Posts containing swear words, discrimination, offensive language and libellous or defamatory comments will not be approved.

Subscribe to our newsletters

Gin Buyer

Craft Gin Club
London (Fitzrovia)

Customer Service & Operations Administrator

Marussia Beverages UK Ltd
London, UK

Marketing Director

Fishers Gin
London, UK

Sales Account Manager

Berkmann Wine Cellars
London, UK

Sales and Brand Manager

The Duchess Virgin Gin & Tonic
London, UK

Brands Sales Executive

Woolf Sung Ltd
London, UK

International Logistic Manager

Wine Source
London, UK

Sales Scotland

Liberty Wines
Scotland, UK

Prosecco Springs

London,United Kingdom
26th Apr 2018

Spirits & More

Rome,Italy
19th May 2018

db Awards 2018

London,UK
23rd May 2018
Click to view more

The Global Malbec Masters 2017

the drinks business is proud to announce the inaugural Global Malbec Masters 2017

The Global Sparkling Masters 2017

the drinks business is thrilled to announce the launch of The Global Sparkling Masters.

Click to view more