In a setback to the United Breweries Holdings Ltd. (UBHL), a Division Bench of the Karnataka High Court, on Monday, directed the company not to sell, transfer or part with possession in respect of any of its assets.
A Division Bench, comprising Justice D. V. Shyeldra Kumar and Justice B. S. Indrakala, passed the interim order on an appeal filed by BNP Paribas, which had financed Kingfisher Airlines Limited (KAL) through KF Aero to acquire three aircraft. In the appeal, the creditor has questioned the May 24 order of single judge bench permitting UBHL to sell 1.36 crore shares of United Spirits Ltd (USL) held by it [UBHL] to Diageo Plc. The Division Bench also ordered issue of notices on the application to make Diageo Plc, which has already purchased 1.36 crore shares of USL from UB, as a party in the litigation.
The single judge bench, which is hearing petitions seeking winding up of UBHL and KAL, had already imposed other conditions, which BNP Paribas claimed as insufficient to protect the interest of the creditors.
It has been alleged in the appeal that the single judge had allowed sale of shares without conducting proper investigation into the certain huge transactions of UBHL and without taking sufficient steps to protect the interest of the general body of the creditors of KAL and without ensuring that the sale of shares workout in favour of the creditors of UBHL.