Mumbai: Markets regulator Sebi on Wednesday barred beleaguered liquor baron Vijay Mallya from the stock market for fraudulently diverting about Rs 1,881 crore from United Spirits (USL) to various other entities within the UB Group, including now grounded Kingfisher Airlines (KFA). Sebi also barred Mallya, who fled India to avoid arrest by investigative agencies, from holding the position of a director in any listed company in the country. The regulator also directed USL to initiate action against Mallya and UB Group companies to which funds were wrongfully diverted by him.
Currently, Mallya is the chairman of United Breweries and United Breweries (Holdings). Following the Sebi order, he will have to relinquish these positions.
Sebi also barred six other people, including Ashok Capoor and V K Rekhi, both former MDs of USL, from the market. Capoor has also been barred from directorship of a listed company.
Relying on forensic audits by various arms of global audit and consultancy major PwC, Sebi in its report said that Mallya, who was then the chairman of USL, “exerted pressure and influence over USL employees to arrange funds for KFA”. The report, among other documents, cited an e-mail from Mallya to Capoor and P A Murali, then a director with USL, saying that KFA had significant dues towards the Income Tax Appellate Tribunal and instructed that USL “would have to come up with Rs 44 crore, if needed”.
In another instance, when Capoor told Mallya that it was not possible for USL to support UB Group companies to meet any of their needs and, in fact, USL needed support from UB Group companies in those circumstances, Mallya wrote that he was fully aware of USL’s position and that asking for support from the company was Mallya’s final call. “If you cannot accept my instructions, you are free to decide your further steps…but let me repeat, my call is final and an instruction,” Mallya wrote to Capoor, the Sebi report showed.
Sebi also instructed USL to report to it, within 21 days, about the action it has initiated against Mallya, Capoor and others. Sebi also wants USL to take steps to recover about Rs 1,881 crore from Mallya and the companies to whom those funds were wrongly diverted.