India: Court allows liquidator to sell Mallya’s United Breweries shares worth Rs 1,000 crore

In a major step to partly recover outstanding dues from Vijay Mallya, a Prevention of Money Laundering Act court rejected United Breweries Holdings Ltd.'s plea to stay the proposed sale of shares worth around Rs 1,000 crore of its erstwhile subsidiary United Breweries by a court-appointed liquidator, BloombergQuint reported on March 26.

Special judge MS Azmi rejected their plea on the ground that the court may not have the powers to grant a stay on the proposed sale.

This is the first sale of Mallya’s confiscated assets by the authorities since he left the country in March 2016.

United Breweries shares closed over 2 percent up on the BSE at Rs 1,347.90 on March 26 and the sale of 74.04 lakh shares at this price would fetch around Rs 999 crore.

Beermaker Heineken is the largest shareholder of UBL with a 44 percent stake. Earlier this month, it approached the State Bank of India to sell them, following which the bank moved the Karnataka High Court seeking rights over a 2.8 percent stake in UBL on March 18.

The shares are currently held by a court-appointed liquidator and was previously owned by UBHL, the erstwhile holding company of all firms owned by Mallya. UBHL is currently owned by the world's largest liquor company Diageo of England.

Earlier this month, the Debt Recovery Tribunal transferred the shares (about 74 lakh) to a court-appointed liquidator. These shares were earlier attached by the Enforcement Directorate, which is investigating allegations of money laundering against Mallya.

UBHL, on March 22, had moved the special PMLA court to stop the sale of 74 lakh shares of UBL scheduled for Wednesday.

These shares were pledged as collateral by the then owner Mallya through one of his companies UBL. Mallya was declared as a fugitive economic offender by domestic courts earlier this year.

Mallya-promoted Kingfisher Airlines, which ceased operations in December 2012, owes over Rs 9,000 crore to a clutch of lenders led by SBI.

UBHL had sought a stay on the share sale pointing out that these shares along with other properties are already attached by the Enforcement Directorate and have multiple claimants, including the Enforcement Directorate, the banks and DRT.

They also claimed DRT and banks ignored the order passed by the Karnataka High Court stating that the sale of the shares would be subject matter of the special PMLA court.

The Bengaluru bench of the DRT had on March 11 issued a notice to sell these shares. The DRT had stated that shares were being sold to partly recover the secured debt of Rs 6,203.35 crore towards the loan taken by Kingfisher Airlines. Along with interest and penalties banks are demanding Rs 9,000 crore from Mallya.

25 March, 2019