India: UB chairman Mallya to justify $40 million gift to children

Vijay Mallya, Indian billionaire, who fled last March to England to escape creditors and Indian tax authorities, was asked on Wednesday by the Indian Supreme Court to explain the transfer of $40 million to his children, a sum out of a $75 million package he received from liquor maker Diageo Plc. following his resignation as chairman of United Spirits Ltd in February 2016.

On 25 November, Mallya admitted in an affidavit that he had transferred the amount to his three children through gift settlements within two days of receiving it. He told the court that Siddharth, Leena and Tanya Mallya were US citizens and that he had no control over their assets.

Mallya, who is known as the King of Good Times for his party lifestyle, suffers from the collapse of his Kingfisher Airlines in 2013 leaving unpaid wages and angry creditors. Already in 2012 he had be forced to give up control in United Spirits Ltd, the third-largest manufacturer of spirits products in the world, which he sold to market leader Diageo in a $2 billion deal. As most of the transaction proceeds were received in overseas accounts the money was not used to repay loans to Indian banks in 2012 which lent Rs 7,200 crore ($1.1bn) to Mallya-owned Kingfisher Airlines.

Last April, the Supreme  Court directed Mallya to disclose all the assets held by him and his family. Mallya agreed to disclose a list of assets held by him in India in a sealed envelope to the Supreme Court and requested it to not hand this information to banks.

 Mallya is still Chairman of United Breweries Group, a position he took over from his father 34 years ago. Since then he has grown the company into a multi-national conglomerate involved in beverages, aviation, electrical and chemical fertilizers.  United Breweries (UB), which is part of UBG is India's largest producer of beer and known for its brand Kingfisher. It is speculated that Dutch brewer Heineken, which holds almost 50% of UB’s shares could force Mallya to step down from the UB board he chairs.

Share this article: