• Friday, March 29, 2024

Business

Diageo sued Mallya for 40 million dollars payout

By: JurmoloyaRava

On Friday Diageo, the UK-based producer of Johnnie Walker scotch and Smirnoff vodka, said that it filed suit this week in the UK High Court against Vijay Mallya, the Indian tycoon and founder of Diageo’s Indian subsidiary, United Spirits.

Diageo Plc sued to recover a $40 million payment made when he was ousted from United Spirits Ltd. last year. The drinks giant claims, Mallya breached a $75 million agreement, of which it had already paid out $40 million, when he stepped down as chairman of United Spirits in February 2016.

To which the spokeswoman from Diageo said, “Diageo is pursuing substantial repayment and compensation from Vijay Mallya and certain of his affiliated companies. They include seeking compensation from Mallya for breaches of the agreements announced in February 2016 that ended his association with United Spirits.”

It’s also seeking about $141 million in questionable payments made by companies affiliated with Mallya. His son, Sidhartha Mallya, is also named in the suit. Diageo has amassed a 55% stake in United Spirits since it first purchased a share of the Indian whiskey producer in 2013. It battled for months to oust Mallya as chairman after an internal inquiry alleged he’d diverted funds to other companies under his control.

Mallya flew to the UK in March 2016 as Indian lenders to his defunct Kingfisher Airlines Ltd moved in on him, following the payment made by Diageo, to recover Rupees. 9,100 crore they claim the airline owed them.

The Diageo suit comes as Mallya prepares for an extradition hearing in London next month over allegations that he committed a billion-dollar fraud.

Mallya, who is currently out on bail, said that his lawyers were reviewing Diageo’s suit and that any actions against him would be defended. He also denied fraud allegations in India.

[TheChamp-Sharing]

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