Courts may sell Mallya’s shares worth £140m

India’s justice system continues to turn the screws on VJ Mallya, the former head of United Breweries and United Spirits, as reports emerge suggesting the courts may sell his shares in both companies, estimated to be worth roughly £140 million.

Vijay Mallya (Photo: Wiki)

Reports from New Delhi suggest that the country’s Enforcement Directorate (ED) is about to force the sale of his holdings in both companies to meet part of the £1 billion-plus debts the banks claim he owes to them in the wake of the 2012 collapse of his Kingfisher Airline.

According to the latest Bombay Stock Exchange records, Mallya holds a 0.01 per cent stake in United Spirits and 8.08 per cent of United Breweries. Together the stakes could be worth approximately £140m.

The plan is for the ED to ask the Prevention of Money Laundering Act court for permission to sell Mallya’s shares and for the proceeds to placed in fixed deposits until the cases against him are concluded.

Mallya would be unable to prevent the share sales if such orders are issued.

He has already been banned by the courts from holding any formal office or position of influence within publicly listed companies and has been removed from the chairmanships of both United Breweries and United Spirits.

He fled to Britain in March 2016 and India has issued at least two warrants for his extradition for crimes including money laundering. He has been held in contempt of India’s Supreme Court for failure to fully disclose his assets and is likely to be imprisoned if he is brought before it for sentencing.

Mallya is on bail in Britain awaiting the start of full extradition hearings in early December.

Meanwhile Diageo, which controls United Spirits, has announced that it will make no further payments to Mallya under the terms of its February 2016 agreement for him to sever links with the company and is demanding repayment of the initial £28m he received, because of alleged breaches of that deal, plus compensation.

Mallya denies all charges of wrongdoing, claiming that they are politically motivated. He maintains that he wishes to come to a settlement with his creditors.