Vijay Mallya’s confiscated shares to be sold

The sale of Vijay Mallya’s confiscated shareholdings in India could go ahead soon.

A special court hearing the Prevention and Money Laundering Act (PMLA) cases has given permission for a consortium of banks to sell equity holdings owned by the former head of United Spirits seized by the country’s Enforcement Directorate (ED).

Sources close to the bank consortium reckon that up to £1.7 billion could be raised in the sales, which would be more than sufficient to repay the banks the £1.15 billion they claim to be owed as a result of the failure of Mallya’s Kingfisher Airlines in 2012.

He has always contended that the sum owed is far less and that he has offered to repay the outstanding loans. He fled to the UK in March 2016 and is now awaiting the result of his appeal against extradition to India to face charges of fraud and money laundering.

Mallya personally held 7.91% stake in UB Holdings, his overall holding company, as of December 2016, but controlled the company through a web of family and other indirect holdings.

The shares seized include almost 16% of United Breweries, the country’s largest brewer. Heineken now exercises effective control of the company through its 44% stake previously acquired largely from Mallya. The Dutch group is an obvious potential buyer of some or all of the shares to be sold to give it full control of United Breweries.

In addition to the banks, Diageo is seeking to recover debts of up to £250m owed by Mallya to it and United Spirits.