Trouble mounts for businessman Vijay Mallya as the world’s largest liquor company, Diageo Plc has allegedly decided to withhold the remaining $35 million of the $75 million amount the company had agreed to pay him. This development was informed by the two executives of the company. Diageo will instead try to recover dues from Mallya, they said.
According to a report in Economic Times, Diageo had given $135 million to the Standard Chartered Bank as a conditional guarantee for the liabilities of Watson Ltd, a company affiliated to Mallya, which they now try to recover.
The report further said that $40 million was paid by Diageo, the maker of Smirnoff vodka and Johnnie Walker scotch, as part of $75 million settlement last year in March.
“The remaining $35 million will not be paid now,” the two executives said. “The decision to not honour the deal signed with Mallya is also on account of charges of various financial misappropriations from USL and fund diversion by him,” they further said.
According to the report, the absconding businessman had resigned as director and chairman of the USL in 2012 and agreed not to compete with Diageo in the liquor business for the next five years.
Despite being asked several times to come back to India, Mallya has stay away from the country. According to the report, he has been asked to return for questioning over alleged diversion of loans that haven’t been repaid.
Several complaints have been filed by the Indian unit of Diageo against the businessman after inquiries uncovered “improper transactions” worth Rs 1,225.30 crore. Funds had been diverted to half-a-dozen companies by Mallya, USL said.
However, the liquor company has been criticised for giving Mallya a sweetheart deal despite complaints by the USL board over initial findings that he had violated several laws.
The Supreme Court on July 14 said that it wanted the presence of liquor baron Vijay Mallya in the contempt case against him. The Attorney General KK Venugopal, appearing for Centre told SC, extradition proceedings being conducted in UK Court and would most likely end by December 4.
Mallya, who was held guilty of contempt, on Monday failed to make a personal appearance before the Supreme Court despite being directed to do so. A bench comprising of Justices AK Goel and UU Lalit fixed the matter for hearing on July 14 and sought the assistance of the solicitor general in the case.
The apex court had on May 9 held Mallya, who is presently in the United Kingdom, guilty of contempt on a plea by the consortium of lender banks, led by the State Bank of India, for his failure to furnish details of all his Indian as well as offshore assets.