India: Supreme Court asks Mallya to explain transfer of Diageo payout to his children

The Supreme Court on January 11 asked businessman Vijay Mallya to explain why he transferred the $40 million payout he received from London-based liquor maker Diageo Plc. to his children, Livemint reported.

A bench comprising justices Kurian Joseph and A.M. Khanwilkar was hearing a plea filed by a consortium of banks that sought to recover the $40 million from Mallya.

On 25 November, in an affidavit submitted before the apex court, Mallya admitted that the money had been transferred to his three children—Siddharth, Leena and Tanya Mallya—who were US citizens and sole beneficiaries of the three respective trusts over which he had no control in his individual capacity.

Mallya had received the payment of $40 million out of a $75 million package from Diageo following his resignation as chairman of United Spirits Ltd in February 2016.

In April, the apex court directed Mallya to disclose all the assets held by him and his family, after the consortium of creditors spurned his offer to repay Rs4,000 crore to settle the debt of Kingfisher Airlines. He later 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.

The banks had moved the debt recovery tribunal against Kingfisher Airlines in 2013 for defaulting on loans. The consortium of 17 banks is owed a combined Rs9,091 crore by the defunct airline. The banks have informed the court that they were willing to negotiate a settlement.

In a 13 March statement, Mallya claimed that banks had already recovered Rs2,494 crore from Kingfisher Airlines since 2013.

The case will be heard next on 2 February.

10 January, 2017