Asked to quit United Spririts’ board, Vijay Mallya struck a defiant note saying he ‘intends’ to continue as its Chairman and refuted the charges made by the company’s board with regard to its prior-period accounts.
Mr. Mallya, who has sold controlling stake in United Spirits Ltd (USL) to world’s largest spirits maker Diageo, also said that only “shareholders can ‘oust’ a Director” and he would continue to function as USL Chairman “in the normal manner”.
Alleging fund diversion to Kingfisher and other UB group entities, United Spirits’ board on Saturday asked Mr. Mallya to quit the board. The company said it has “lost faith” in Mr. Mallya and would go to shareholders if he refuses to resign.
Reacting to the charges, Mr. Mallya said in a statement, “All I wish to say is that I intend to continue as Chairman of USL in the normal manner. This includes chairing monthly operating review meetings and board meetings.”
Mr. Mallya, once known as King of Good Times, also said that he has a “valid contractual agreement” with Diageo on his position as Director and Chairman of USL and he would discuss the matter “bilaterally” with the UK-based company.
He also took to social media platform Twitter with a series of tweets explaining his position.
“People and media revel in speculation sensationalisation and character bashing. Unfortunately for you I intend to continue as USL Chairman.
“I am not going to submit myself to a trial by media. I know the facts and so do all with fiduciary responsibilities. I have legal rights too.
“If media want to have a field day and sensational headlines I want to say that I will continue as normal in my position as Chairman of USL,” Mr. Mallya said in his tweets.
“Please appreciate that only shareholders can ‘oust’ a Director,” he said in another tweet last night.
Diageo now holds a controlling stake of about 55 per cent stake in USL, which it has acquired for about $ 3 billion, while Mr. Mallya continues to own a small stake of 0.01 per cent in his personal capacity. Some of his UB Group firms also continue to hold stakes totalling about 3 per cent.
After hours-long meeting on Saturday, the USL board asked Mr. Mallya to step down after “various improprieties and legal violations” were found in a probe into loans worth Rs. 1,337 crore given by USL to UB Group firms.
USL, the erstwhile flagship firm of the UB Group, has already seen a number of exits from its board and top management since the probe was launched by Diageo. The company’s Chief Financial Officer resigned last week.
Mr. Mallya has been in the dock ever since his ambitious airline venture Kingfisher landed in financial troubles and got eventually grounded in October 2012.
Thereafter, Mr. Mallya had to sell some of his assets, including controlling stake in USL to Diageo.