Diageo has asked Vijay Mallya to return $40 million that was paid by the British multinational to the former liquor baron last year, as part of a deal that saw him stepping down from United Spirits. In its preliminary results for the year ended June 30, the company said, “Diageo and other group companies have demanded from Mallya the repayment of $40 million which was paid by Diageo on February 25, 2016, and also sought compensation from him for various losses incurred by the relevant members of the Diageo group on account of the breaches committed by him.”
The company added, “While the first instalment of $7 million would have become due on February 25, 2017, owing to various reasons, including breaches of several provisions of the February 25 agreement committed by Mallya, Diageo believes that it was not liable to pay such amount, and is very unlikely to become liable to pay future instalments to Mallya.”
The deal struck between the two parties included upfront payment of the amount, with the balance being paid in equal instalments over the next five years, provided Mallya comply with the terms of the agreement such as a five-year global non-compete and non-interference among others. Mallya stepped down as chairman of United Spirits after it was alleged that he diverted funds to the now defunct Kingfisher Airlines and his Formula One team.
