The Enforcement Directorate (ED) on Tuesday informed the High Court of Karnataka that it cannot agree for sale of certain shares, seized by it from United Breweries (Holdings) Ltd., till the conclusion of confiscation proceedings in the case of money laundering booked against Vijay Mallya and others, and conclusion of trial under the Prevention of Money Laundering Act.
A written statement was submitted before a Division Bench comprising Chief Justice Subhro Kamal Mukherjee and Justice P.S. Dinesh Kumar during the appeal filed by UBHL against the order for winding up the company. ED Special Public Prosecutor S. Mahesh, in the written statement, said that “in view of the fact that the ED had reasons to believe on the materials in their possession that the appellant [UBHL] was in possession of proceeds of crime, they had initiated attachment proceedings as per Section 5(5) of the Act, which has been confirmed by the Adjudicating Authority.”
Under these circumstances, the statement said: “the ED is not empowered to permit the sale of attached properties, which are shares in this case, in favour of the appellant for any purpose much less for the purpose of selling it and to disburse the sale proceeds to its debtors or the same to be deposited before the court.”
While requesting the court to reject UBHL’s plea for selling shares, the ED stated that “severe harm and injury” would be caused to ED whereas no such harm would be caused to UBHL.
Following this, the Bench directed the Official Liquidator, who is set to take charge of UBHL based on the order for liquidation, not to precipitate the matter, while deciding to continue hearing of the appeal after court’s summer vacation in June.
The UBHL proposed to deposit the amount, which could be realised by selling the seized shares, before the court to demonstrate that it is a going concern and to convince the Division Bench to stay the order of winding up the company passed by a single judge.
