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Vijay Mallya barred from directorship at listed companies and from trading

Regulator SEBI's order effectively puts in jeopardy Mallya's chairmanship at United Breweries Limited, maker of Kingfisher beer, and United Breweries Holdings Ltd

Published: Jan 26, 2017 08:53:26 AM IST
Updated: Jan 26, 2017 08:51:58 AM IST

Vijay Mallya barred from directorship at listed companies and from trading
Industrialist Vijay Mallya
Image: Ahmad Masood / Reuters

More bad news of beleaguered industrialist Vijay Mallya, who had “allegedly” fled from India in March last year and has been staying at his London residence, ever since.

On Wednesday, the Securities and Exchange Board of India (SEBI) barred Mallya from holding any position of ‘director’ or ‘key managerial person’ in any listed company in the country and also from accessing the securities market. The same orders were also issued against former United Spirits Ltd (USL) managing director and Mallya’s close aide, Ashok Capoor.

Six days ago the Debt Recovery Tribunal, in Bengaluru, passed an order allowing banks to recover their dues of over Rs 6,000 crore from Mallya and his associate companies.

The latest SEBI order puts in jeopardy Mallya’s chairmanship at both United Breweries Ltd, which is India’s largest beer manufacturer, and United Breweries Holdings Ltd, the investment arm of Mallya’s crumbling UB Group.

SEBI has been investigating into charges of fund diversion and improper transactions at USL, when the Indian spirits manufacturer was under Mallya’s control. SEBI’s investigation found that Mallya and former USL key management personnel (KMP) that include Ashok Capoor, P A Murali, Sowmiyanarayanan, S N Prasad, Paramjit Singh Gill and Ainapur S R were “prima facie alleged to have committed fraudulent and unfair activities prohibited under the SEBI Act, 1992  and the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003.”

“It appears that Mallya in his capacity as Chairman of USL during the relevant period was instrumental in the diversion of funds from USL. In his endeavour to supply funds from USL to various companies/entities of the UB Group including KFA (Kingfisher Airlines), he had exerted pressure on the aforementioned KMPs to comply with his instructions and the same were complied with as noted from the e–mails extracts reproduced at paragraph 2.1(A),” read the SEBI order.

Reacting to the order, an e-mailed statement from Mallya read: "Neither have I had any communication with SEBI nor have I ever been afforded a hearing before this purported action has been taken. I have always strongly denied all allegations made by USL.”

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