Indian tycoon Vijay Mallya faces a second legal battle after Diageo sued him to recover a $40 million payment made when he was ousted from United Spirits last year. The suit came a couple of weeks before his London extradition hearing. The drinks giant claims that Mallya breached a $75 million agreement, of which it has already paid $40 million, made when he stepped down as chairman in February 2016. Diageo also seeks $141 million over questionable payments made by companies affiliated with the businessman.
The British multinational owns 55 per cent stake in United Spirits since it first purchased a share of the Indian whiskey producer in 2013. Last year, it agreed to pay $75 million to Mallya over five years, to leave the company and not compete or interfere with it for five years. Diageo said as part of the arrangement, it would release Mallya from liabilities flagged in the internal report. “Diageo is pursuing substantial repayment and compensation from Mallya and certain of his affiliate companies. Also named in the suit is Mallya's son Sidhartha.
The former Kingfisher owner was arrested in London on April, on a warrant issued by Indian authorities. He is accused of wilfully defaulting on more than $1.4 billion in debt accumulated by Kingfisher Airlines, by a consortium of 17 banks. Mallya has said that the Diageo suit was being reviewed by his lawyers and he would defend any action against him. He has also denied the allegations related to the Indian fraud charges.
