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Your email address will not be published.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

Awards Wine Checker

Decanter
Paddock Wood, Kent, GB

Customer Service Advisor

Amathus Drinks
Park Royal, London, UK

Sales Manager

James Eadie Ltd
London, UK

Wine Ambassador Role

Ramón Bilbao UK
London, UK

Fine Wine Logistics Coordinator

IG Wines
London, UK

Sales Manager

Top Selection
London, UK

Assistant Retail Manager

The Whisky Exchange
London, UK

Marketing Manager

Ellis Wines
Hanworth, Middx, GB

Commercial Analyst

ATOM Group
Tunbridge Wells, UK

Customer Service Executive

Marussia Beverages
Marylebone, London, UK

The World Bulk Wine Exhibition

Amsterdam,Netherlands
20th Nov 2017

The Global Spirits Masters Lunch

London,United Kingdom
1st Dec 2017

International Bulk Wine and Spirits Show

London,United Kingdom
26th Feb 2018
Click to view more

Champagne Masters 2017

The only Champagne blind tasting in the UK, the competition will reward the best wines in the following categories:

The Global Rosé Masters 2017

With wines from the palest of pink to almost ruby red, bone dry to almost cloyingly sweet, reductively handled to barrel-aged, as well as gently spritzy to fully sparkling.

Click to view more