India: United Breweries shares fall amid speculation Vijay Mallya may step down and sell his stock

Shares of United Breweries Ltd fell by over 2 per cent on June 16 amid intense speculation that its Chairman Vijay Mallya may have to step down soon and sell his shares due to tightening of noose by markets regulator Sebi, MSN.com reported.

Mallya-led UB Group is already being probed by Sebi for suspected violation of various securities markets regulations including about disclosure and related party transactions, while a 'wilful defaulter' tag has made it difficult for the beleaguered businessman to continue on boards of listed firms.

The shares of United Breweries Ltd, where the UB Group no more has majority stake but remains a co-promoter along with global giant Heineken group, slumped 2.11 per cent to settle at Rs 745.35 on BSE.

Intra-day, it slipped as much as 2.67 per cent to Rs 741, as market was rife with speculation that a board meeting could be held soon where Mallya would be asked to leave.

On NSE, it fell by 2.44 per cent to close at Rs 743.45.

Mallya, who is said to be in London while arrest warrants have been issued for him back home, is said to have attended the last board meeting of the company through video-conferencing after which some directors of the company said they have full faith in him.

This may not have gone well with the regulator and other enforcement agencies, as rules do not allow a person classified by banks as a 'wilful defaulter' under RBI norms to continue on the board of any listed company.

Surprisingly, shares of another listed company of UB Group, United Breweries (Holdings) Ltd, rose by 4.46 per cent to Rs 22.25 on BSE, even as the company on June 16 disclosed an attachment notice issued by Enforcement Directorate and said it is seeking legal advice to take appropriate steps.

Various listed firms of the Group have in the past been found to have violated listing and disclosure regulations of Sebi, while the regulator is also probing the group for other violations including for related party transactions and alleged diversion of funds for undue benefit to the promoters.

Besides, the Sebi norms do not permit wilful defaulters to hold board positions at listed companies.

Mallya recently resigned as Chairman and Director of United Spirits, after striking a sweetheart deal with Diageo, the new controlling owner of the erstwhile flagship company of his group.

17 June, 2016