Vijay Mallya Could Lose Post As Chairman Of Firm He Inherited At 28

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Heineken is likely to ask Vijay Mallya, who owes creditor banks more than $1 billion, to step down from the board of United Breweries, India’s largest brewer, three people with direct knowledge of the plan told Reuters.

They said such a move would likely be a prelude to the Dutch drinks firm raising its stake in the maker of Kingfisher beer to above 50 per cent, betting on a small but fast-growing beer market.

Heineken acquired a 37.5 per cent stake in United Breweries in 2008 through its takeover of Scottish & Newcastle and has since increased its holding to 42.4 per cent. With Mr Mallya distracted by debts from a collapsed airline venture, this could be a timely grab by Heineken in a market that is growing much faster than the global average.

The sources said Heineken was considering asking Mr Mallya to step down from the United Breweries board he chairs. Alternatively, it could call a shareholder meeting to vote on his ouster from a company his father built into a family empire.

The sources asked not to be named due to the sensitivity of the matter.

A Heineken spokesman declined to comment on any move to tighten control over the Indian joint venture, but said India remains an “exciting opportunity” for growth given its demographics and strong economic fundamentals.

Mr Mallya and a spokesman for UB Group did not respond to emailed requests for comment. He left India early this month – as banks sought a court order to confiscate his passport – and has not disclosed his whereabouts, but he has used his Twitter account to say he is not an “absconder” and would comply with Indian law.

Banks, regulators and investigators in India have turned up the heat on Mr Mallya, who inherited United Breweries at the age of 28 and led it on an ambitious expansion.

His Kingfisher Airlines collapsed in 2013 leaving unpaid wages and angry creditors.

Mr Mallya has already been forced to give up control over United Spirits, part of his UB Group, to Diageo, which now owns about 55 per cent of the company. He stepped down from the board last month, receiving a $75 million pay off.