Following requests from bourses National Stock Exchange and BSE, market regulator Sebi is investigating the affairs of some Vijay Mallya-controlled UB Group firms for alleged non-compliance with disclosure norms.
The stock exchanges have raised various concerns mainly about two UB Group firms — Kingfisher Airlines and United Spirits — for not providing required disclosures and not adhering to deadline regarding financial results and the Annual General Meeting.
Officials said that SEBI has started investigations into the issues related to Kingfisher and United Spirits Ltd (USL) following requests from the two bourses. The regulator has got information and is in the process of gathering more details, they added.
“SEBI will also look into contradictory statements made about stake sale in Kingfisher to foreign airlines and private equity players. The regulator may seek related information from the lenders also,” a senior regulatory official said.
The regulator is also looking at reports about United Spirits selling stake to UK’s Diageo Plc, the official added.
When contacted, UB Group spokesperson said that Sebi has sent a set of queries to United Spirits related to an announcement with Diageo Plc.
“The movement in share prices of our group companies has been largely influenced by the wide speculation by the media with no comments from us.
“SEBI has written to USL with a set of queries following a joint announcement with Diageo Plc on September 25. We have provided the information,” an UB Group spokesperson said.
Late last month, Vijay Mallya had said that Kingfisher was in talks with foreign airlines for possible stake sale.
However, according to lenders, the domestic carrier was in discussions with private equity players.
The NSE and the BSE had sent notices last month seeking clarification from Kingfisher regarding reports about possible stake sale in the airlines.
However, the bourses were apparently not satisfied with the replies provided by Kingfisher to their notices.
The senior regulatory official said the responses sent to NSE and BSE were forwarded to Sebi, which is further looking into the matter.
Responding to bourses, Kingfisher had said the matter was not disclosed to the bourses first as the carrier did not consider it as a “price—sensitive information“.
SEBI’S move comes in the wake of spurt in stock price of United Spirits recently.
On September 25, shares of UB group firms had jumped surged as much as 20 per cent after United Spirits said UK—based Diageo Plc is in talks to buy stake in the Vijay Mallya owned firm.
Among other companies, group holding firm UBHL scrip surged 19.97 per cent to Rs 132.45 while United Spirits soared 8.89 per cent to close at Rs 1,147.70 on the BSE.
Besides, Kingfisher Airlines surged 8.08 per cent and UB Engineering shot—up by 15.70 per cent.
Kingfisher owes over Rs 7,000 crore to 17 banks in the long—term debt and has accumulated losses of around Rs 8,000 crore.