In a big blow, Karnataka High Court has ordered the winding up of liquor baron Vijay Mallya's United Breweries Ltd, parent company of UB Group. Justice Vineet Kothari, in his order allowing petitions by banks and aircraft lessors, said, "This court has come to a conclusion that the respondent company UBHL deserves to be wound up for failure to discharge their duties to pay up their creditors." He pronounced the order through video conferencing.
He said assets of the respondent company cannot be left under the control of UBHL and could be handed over to official liquidator to achieve the winding up process as per the law. The court was moved by creditors including BNP Paribas, State Bank of India and aircraft lessors and engine makers such as Rolls Royce and IAE, to get back their dues of £14.6 million. Justice Kothari also disposed of all interlocutory applications filed by UBHL. UBHL had given corporate guarantees for loans to run Kingfisher. Mallya owns 52.34 per cent in the company.
Extradition request
India has handed a formal request to the UK for Mallya's extradition to face trial in India. Confirming the development, foreign ministry spokesperson Vikas Swarup said the request, as received by the CBI, was handed over to the UK high commission in New Delhi. "We have an extradition treaty with the UK, and we believe we have a legitimate case against Mallya," he said.
After the UK refused to deport Mallya last year, CBI's request for the liquor baron's extradition was sent through the foreign ministry. A non-bailable warrant has been obtained against Mallya after filing a chargesheet last month. Following the Securities and Exchange Board of India's directive on January 25, United Breweries has asked him to step down, barring him from holding the position of director in any listed Indian company. Officials said the extradition request had to be issued as Mallya didn't respond to requests by the CBI and the ED to join investigations over the last 11 months.
In the meantime, United Breweries will call for an extraordinary general meeting of shareholders to evict its chairman Mallya, if the latter fails to accede to a request made by the board of directors to step down, after Sebi barred him from holding any post in public listed companies. This could also coincide with Dutch beer giant Heineken, which owns 43 per cent stake, moving to take "effective management control" of the Kingfisher beer maker.
