Finally the liquor baron of India, Vijay Mallya had resigned from the chairmanship of United Spirits with the souvenir of 515 crores from the new promoter of the company Diageo. According to the sources after this deal, the 60-year-old flamboyant businessman has decided to move to the UK to be with his children.
According to the news published by the PTI news agency, the flamboyant businessman Vijay Mallya had resigned from the position of chairman of United Spirits handing over the helm of the company to the new promoter Diageo from the United Kingdom, who owns now the majority of the stakes in the company. According to the sources, the deal has been done against the payment of 515 crores for which Mr. Mallya has given up all his rights as founder and chairman of the company.
[su_expand more_text=”READ MORE” less_text=” ” height=”0″ hide_less=”yes” link_style=”button” link_align=”center”] It may be recalled that Mr. Mallya was facing the huge financial liabilities towards the loans which he had taken from the various banks and was unable to repay them. His plush bungalow in Goa and Mumbai were auctioned by the banks to recover the dues from him. The recent deal of giving up the chairmanship of United Spirits which is bagged by Diageo with the majority of the stakes in the company has amounted into absolving him from all the liabilities over alleged financial lapses at the company founded by his father.
According to the sources, Mallya along with his group of firms is fighting ‘Willful Defaulter’ tags given by various lenders from whom he borrowed the loans for the presently grounded Kingfisher Airlines. He told the media that now he will spend some more time in England closer to his children. “The time has now come for me to move on and end all the publicized allegations and uncertainties about my relationship with Diageo and United Spirits Limited,” Mallya’s statement read. “I am resigning my position with immediate effect.”
The sources also revealed that his son Siddharth Mallya managed a sweetheart deal, with Diageo agreeing to retain him as Director of the USL Group firm that runs the RCB cricket team of IPL cricket tournament for at least two years. Mr. Mallya has voluntarily agreed to step down from the position of chairman and non-executive director of United Spirits Ltd. (USL) by retaining the legacy of his company by retaining the position of ‘founder emeritus’ of USL and Chief Mentor of RCB (Royal Challengers Bangalore) “I am pleased to have been able to agree on terms with Diageo and USL. The agreement we have reached secures my family legacy,” he told the media.
Diageo later told the media that, based on the agreement contents Mallya will have no personal liability to the UK based company in regards to the alleged financial irregularities in the companies. These allegations, which surfaced after an internal inquiry, related to the period before Diageo acquired controlling stake in USL from the Mallya family in a multi- billion dollar deal.
Diageo has confirmed that Mallya has decided giving up all his rights and benefits attached to his position as chairman and non-executive director of the company. Presently Diageo has agreed to pay 40 million USD instantly with balance money to be paid in equated installments over the period of five years. The payment is done for “his agreement to five-year global non-compete (excluding the UK), non-interference, non-solicitation and standstill undertakings, and his agreement that he and his affiliates will not pursue any claims against Diageo, USL, and their affiliates”.
According to the sources, The resignation has come at a time when State Bank of India and Punjab National Bank have declared Mallya a wilful defaulter for failing to pay dues amounting to R7,000 crore to 17 banks. The loans were taken by now-defunct Kingfisher Airlines. As per the agreement, Mallya signed off any right to compete, interfere or solicit in the businesses of USL. Mallya continues to hold 12,500 shares in USL, as per stock exchange filings.
HERE IS THE FULL STATEMENT OF VIJAY MALLYA
“Having recently turned 60, I have decided to spend more time in England, closer to my children. The time has now come for me to move on and end all the publicized allegations and uncertainties about my relationship with Diageo and United Spirits Limited. Accordingly, I am resigning my position with immediate effect.
I am pleased to have been able to agree on terms with Diageo and United Spirits Limited. The agreement we have reached secures my family legacy.
I have agreed to a mutual release with both Diageo and United Spirits from claims concerning the alleged irregularities disclosed by USL in April 2015. I am now the Founder Emeritus of United Spirits which recognizes my contribution in building United Spirits to what it is today and evokes great emotions and a degree of extreme satisfaction having steered United Spirits from a sales volume of just under 3 million cases to over 120 million cases when control was passed to Diageo.
I fondly remember, as a young boy, launching McDowell’s, which the largest selling brand in the industry is. I also recall the challenges and personal sacrifices in the tumultuous acquisition of Shaw Wallace and the Royal Challenge brand. I feel both happy and satisfied that I helped create United Spirits as a clear market leader in the industry which contributed immensely to the local state economies.
On the sporting front, I will now be the Chief Mentor of the Royal Challengers Bangalore. I have been passionate about this team since inception and am determined to do whatever I can to win the IPL trophy. I am glad that my son, Sidhartha, will remain as a Director as he is equally passionate about RCB.
I have also agreed to a global (excluding the United Kingdom) 5-year non-compete arrangement.”
Source: Various Sources [/su_expand]