After increasing its share in India’s leading brewing group United Breweries Limited (UBL) (“Kingfisher”) from 46.5% to 61.5% (inside.beer, 23.6.2021), Heineken is seeking to oust UBL’s chairman and former majority owner Vijay Mallya. The flamboyant Indian business man is threatened with extradition from the UK to his home country India where he is wanted for embezzling a million dollar amount after the collapse of his Kingfisher Airline. (inside.beer, 21.5.2020)
Mallya became chairman of UB Group in 1983 at the age of 28, following his father's death. In 2004, Scottish & Newcastle (S&N), by that time a leading brewing group from the UK, acquired a 37.5% stake in UBL and agreed to a deal which made Mallya life chairman of the company. When Heineken bought part of S&N in 2008 it also took over the 37.5% stake in UBL. In the following years, Heineken managed to increase its holding to 43%. Even after Mallya fled India in 2016, the Dutch brewer was not able to remove Mallya as chairman of UBL.
However now, with a majority of the votes, Heineken plans to change the company’s articles of association at its annual meeting at the end of this month. The international brewing group plans not only to remove Mallya as life chairman but also wants to cancel his right to appoint a successor. The proposals need a majority of at least 75% of the votes at the annual meeting. Therefore, Heineken needs the help of institutional investors that have already signaled their intention to support the changes.
Instead of being forced to step down, Mallya could also formally resign before the meeting on July 29. Ravi Nedungadi, who has been on the board of UBL since 2002 and is the only remaining nominee of Mallya, has already announced such a step.
He will make place for Berend Odink, chieffinancial officer of UBL since August 2019, who has been named by Heineken.