Arrest Mallya and seize passport, bank says

The State Bank of India has demanded the arrest of Vijay Mallya and the seizure of his passport just days after he announced he was stepping down from Diageo’s United Spirits (USL).

Mallya stepped down as chairman from Diageo with a £53m severance package (Photo: Wiki)

The bank has approached India’s Debt Recovery Tribunal to insist on Mallya’s arrest and for his assets to be used to pay back huge loans on which he has defaulted.

The State Bank of India, part of a group of lenders that funded Mallya’s now grounded Kingfisher airline, is seeking access to the businessman’s £53 million severance package from Diageo, which was revealed along with the news he was stepping down as USL chairman last week.

Mallya has defaulted on the £740 million loan provided by the consortium of lenders, which is headed by the government-owned State Bank of India, leading to him being branded a “wilfull defaulter” by a long list of influential banks.

It is now thought that Mallya could owe his creditors around £820m after interest.

Mallya said last week that he would be looking to spend time with his family in the UK when it was announced he was stepping down as chairman of Diageo-owned United Spirits.

The flamboyant businessman reached an agreement with Diageo on 26 February following years of ill-feeling between the two parties.

Diageo has owned a majority stake in Indian drinks producer United Spirits since 2012.

However, it has been unable to remove Mallya as its chairman, even when investigations into the company’s finances showed potentially gross mismanagement.