Vijay Mallya quits royal challenge, hopes to revive spirits in UK

February 25, 2016

Bengaluru, Feb 25: Troubled tycoon Vijay Mallya on Thursday resigned as the chairman of United Spirits (USL), the country's largest liquor company founded by his late father Vittal Mallya, almost a year after its board had asked him to step down, citing certain inappropriate dealings which occurred on his watch. Former Hindustan Unilever veteran M K Sharma has been appointed as the new non-executive chairman of USL, now controlled by London-based Diageo Plc.

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"The time has now come for me to move on and end all the publicised allegations and uncertainties about my relationship with Diageo and United Spirits Limited," Mallya said. "I am pleased to have been able to agree terms with Diageo and United Spirits Limited. The agreement we have reached secures my family legacy," he added. Vittal Mallya had set up USL soon after India's Independence. Mallya said he has decided to spend more time in England with his children, including eldest son Siddharth Mallya, who is pursuing studies in London. Mallya had earlier told TOI that he was relinquishing control of his group companies as there was no family succession plan. His son, who briefly dabbled in business, had then relocated to Los Angeles to pursue an acting career.

Mallya's exit is a sordid story of a flamboyant industrialist walking away from his flagship as a fallout of the disastrous foray into aviation—the grounded Kingfisher Airlines which saddled the group with Rs 7,000-crore debt. The latest development unfolded even as SBI and Punjab National Bank declared him a wilful defaulter, which threatened to jeopardize banking ties of the companies on which he remains a board member.

Mallya, who turned 60 last December, has signed a five-year non-compete agreement and will desist from buying additional shares in USL. Mallya had agreed to sell controlling interest to Diageo, paving the way for a$3-billion takeover in 2012. However, ties between Mallya and Diageo soured soon thereafter with the board taking note of certain related party transactions, which were rejected by the shareholders.

USL will pay Mallya $75 million over the next five years towards non-compete and non-interference agreements struck as part of the latter's exit deal. The initial tranche of $30 million will be paid in the first year. USL will also allow its former chairman to buy back some of the real estate assets, including Niladri mansion in South Mumbai, which was one of his personal homes, at the prevailing market value. Mallya continues to hold a 4% stake though almost all of this is pledged to various lenders of Kingfisher.

"This agreement is an affirmative action by which Vijay Mallya is disassociating himself from the company completely," Abanti Shankaranarayanan, a spokesperson for Diageo, said in a late night conference call. This rescues the company from all contingent liabilities, safeguards its banking relationships and enables it to focus on performing better in India's $300-billion liquor market, she added.

In April last year, USL board, controlled by Diageo, sought Mallya's resignation stating it had lost confidence in him continuing as chairman of the company due to alleged financial irregularities. Mallya had refused to step down, citing contracts between him and Diageo and had threatened to move courts. But his resistance was seen as a losing battle as Diageo controlled the board and held a 55% stake in the company.

Mallya had indicated in USL's AGM in November he would consider retirement after turning 60. Mallya's exit agreement also settles all claims concerning the alleged irregularities disclosed by USL in April.

Mallya, however, continues to remain as the chairman of United Breweries (UBL) in which he has allowed Dutch beer giant Heineken to emerge as the largest shareholder. Another company UB Holdings, the parent of Kingfisher Airlines, has no significant revenue streams except some rent-yielding commercial real estate assets.

Comments

Zoharab
 - 
Friday, 26 Feb 2016

Please request Mallya to clear his loans & salaries of KF staffs. The goto UK & settle. He still does show off with poor people's money....Very sad nobody is bothered.

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January 18,2025

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Kadaba, Jan 18: In a heartrending incident, a 16-year-old student lost his life on Friday, January 18, after the motorbike he was riding skidded off the road and plunged into a culvert on the Dharmasthala–Mardhala–Subrahmanya state highway near Gargaspal, Peradka. 

The accident spot falls under the Noojibaltila gram panchayat in Kadaba taluk of Dakshina Kannada district. 

The victim, Ashish, a tenth-grade student from a private school in Peradka, was the beloved son of Vishwanath of Hosamane Kaana in Noojibaltila village. His untimely demise has left his parents and sibling in profound grief.

The accident occurred during Ashish’s routine commute to school. Despite the swift intervention of a local resident, Sridhar, who rushed him to a private hospital in Kadaba, medical efforts could not save him. A case has been registered at the Kadaba police station.

The culvert where the accident happened has long been criticized by locals for its flawed and unsafe design. Numerous accidents have reportedly occurred at this spot, prompting repeated appeals from residents for immediate rectification. Community members have once again called upon authorities to prioritize repairs to prevent further tragedies.

Responding to the incident, Kadaba tahsildar Prabhakar Khajure underscored the importance of curbing underage driving. He directed the police department to take stringent action against minors found operating vehicles and cautioned parents about the serious consequences of providing vehicles to underage children.

This incident serves as a grim reminder of the pressing need for both infrastructural improvements and stricter enforcement of traffic regulations to safeguard young lives.

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News Network
January 13,2025

Udupi: A resident of Karkala in Udupi district has accused five individuals of defrauding him of nearly Rs 2 crore under the guise of business partnerships.

Dawood Hakim, a resident of Ennehole in Marne village, Karkala, has filed a complaint stating that he operated a mobile sales and service business on Karkala Market Road for 15 years. He had known the accused for over two decades and trusted them implicitly.

According to Dawood, the accused convinced him to invest in multiple business ventures, including land dealings and a travel business, promising substantial returns and partnership benefits. Believing their assurances, Dawood reportedly handed over cash, gold, and a vehicle.

However, the promised profits never materialized, and the accused allegedly failed to return the money or assets. Dawood claims this deception has caused severe financial distress to him and his family, amounting to a loss of around Rs 2 crore.

A case has been registered at the CEN police station, and investigations are underway.

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News Network
January 9,2025

Mangaluru: In a significant development, Mescom has proposed a phased electricity tariff hike starting with Rs 0.70 per unit for the fiscal year 2025-26. The proposal has been submitted to the Karnataka Electricity Regulatory Commission (KERC) for approval, signaling a potential increase in electricity costs for consumers.

Mescom emphasized that the current tariff structure is insufficient to meet operational expenses and manage revenue effectively. To address this, the company has invited public objections to the proposed hike.

Currently, the electricity supply cost is Rs 9.23 per unit, while the consumer tariff stands at Rs 8.53 per unit, leading to a shortfall of Rs 0.70 per unit. For the financial year 2023-24, Mescom reported revenue of Rs 5,924.73 crore against an expenditure of Rs 6,310.39 crore, resulting in a deficit of Rs 367.66 crore. For the 2025-26 fiscal year, projected revenue is Rs 5,850.81 crore, with an actual requirement of Rs 5,961.63 crore, creating a deficit of Rs 110.82 crore.

In a first, Mescom has submitted a multi-year tariff revision proposal to KERC. The plan outlines a hike of Rs 0.70 per unit for 2025-26, followed by Rs 0.37 per unit for 2026-27 and Rs 0.54 per unit for 2027-28.

"An increase in electricity tariff is inevitable," stated Jayakumar R, Managing Director of Mescom. "Mescom has submitted a proposal in this regard to KERC."

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