India: Diageo to withhold payment of remaining $35 mln to Vijay Mallya

British liquor giant Diageo has decided to withhold remaining $35 million due to Vijay Mallya as part of the $75 million (Rs 515 crore) sweetheart deal for his exit from United Spirits Ltd, Times of India reported on July 17 citing a source familiar with the development.

Also, Diageo is looking to recover dues from the fugitive businessman, who is wanted in India with regard to cases of loan default and diversion of funds.

Diageo had last year paid $40 million to Mallya as part of its payout package.

"They have decided not to pay the remaining $35 million as there was violation of terms of agreement by the other side," a source said on the condition of anonymity.

The British liquor giant was supposed to pay the remaining $35 million in two equal amounts.

The source, however, refused to share the conditions of their "terms of agreement", which were violated by Vijay Mallya.

In July 2016, United Spirits disclosed Rs 1,225.3 crore worth fund diversion and improper transactions with entities associated with Mallya including Kingfisher Airlines and his Formula One team.

Making it clear that the settlement reached earlier with Mallya would cover the latest disclosures, USL - now controlled by Diageo - had said the former Chairman would be liable for claims over the amount.

Several banks have declared him 'wilful defaulter' for failing to pay back loans amounting to thousands of crores.

A consortium of 17 banks lead by SBI has been trying to recover dues of over Rs 9,000 crore from now defunct Kingfisher Airlines, which was promoted by Mallya.

Mallya had come under intense scrutiny after the sweetheart deal he inked with Diageo to exit from the board of the company founded by his family.

18 July, 2017