Diageo asks Mallya to quit USL board; alleges fund diversion

April 25, 2015 22:08

Alleging fund diversion to Kingfisher and other UB group entities, United Spirits' new owner Diageo has asked Vijay Mallya to step down as chairman and director of the Indian liquor firm, a demand he outrightly rejected.

Diageo, which has bought controlling stake in United Spirits from UB Group, asked Mallya to step down following "various improprieties and legal violations" were found after a probe it conducted into loans given by USL to various UB Group companies.

However, Mallya refused to resign and said the inferences and allegations are unjustified and false. USL, the erstwhile flagship firm of Mallya-led UB Group, has already seen a number of exits from its board and top management since the probe was launched by UK-based Diageo.

"At its meeting held on April 25, the Board discussed and considered in detail the report submitted by the MD and CEO in relation to the inquiry...

"The inquiry revealed that between 2010 and 2013, funds involved in many of these transactions were diverted from the company and/or its subsidiaries to certain UB Group companies, including in particular, Kingfisher Airlines Ltd," USL Board said in its inquiry report.

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