E-Malt.com News article: India: United Breweries withholds RS1.64 crore payment to Vijay Mallya

United Breweries Ltd has withheld Rs 1.64 crore payment to its Chairman Vijay Mallya after tax authorities barred any payments made to him in view of ongoing tax case against his defunct Kingfisher Airlines, NDTV reported on August 13.

Without naming Mr Mallya, the company said it has received an order dated June 28, 2016 from the Commissioner of Income Tax (TDS), prohibiting the company from making any payment in the nature of salary, remuneration, allowances etc to a director.

In a stock exchange filing, United Breweries Ltd (UBL) said: "The company has accordingly withheld payment Rs 1.64 crore relating to the director commission and sitting fess payable to the aforesaid director."

UBL further said the company had received an order dated March 11, 2016 from the Deputy Commissioner of Income Tax (International Taxation) Bangalore, asking it "to create a charge in favour of the Central Government on any amount due or likely to be due to a director of the company, to the extent of Rs 67,980 lakh relating to tax demands on Kingfisher Airlines Ltd."

When contacted, a company spokesperson declined to comment.

Earlier on September 30, 2015, UBL said, it had received an order from the Debt Recovery Tribunal Karnataka which directed the company "not to pay/release amounts that may be payable with respect to shares in the company held by a director (including his joint holdings) and United Breweries (Holdings) Ltd, without its prior permission".

"Accordingly the company would withhold payment of proposed dividend on aforesaid shares, which is subject to approval by the shareholders in the ensuing AGM," the filing said.

The board of directors UBL had proposed a dividend of Rs 1.15 per equity share of Re 1 for the year ended March 31, 2016.

As on quarter ended June 30, 2016, Mr Mallya held 8.08 per cent on his own in UBL with 2.14 crore shares, while the promoter group entities hold 30.71 per cent stake with 8.12 crore shares

On the issue of wilful defaulter tag on Mr Mallya and its implications after the recent regulatory changes, UBL said its "board will continue to monitor and review the situation" after a retired Chief Justice of the Supreme Court of India gave opinion "that the Chairman and the company conform to the current regulatory norms".

As per the recent amendments in regulations pertaining to wilful defaulters, restrictions are imposed on a company from floating public issue or raising debt instruments or borrowings and for continuing on the Board.


13 August, 2016