The Supreme Court ruled in the case of Vijay Mallya to allow winding up of his company UBHL.
The former liquor baron holds a little over 10 per cent shares in the UBHL which is majorly owned by Dutch beer maker Heineken and British spirit maker Diageo. Mallya’s shares in the company, along with other assets, were attached by the Directorate of Enforcement as alleged crime proceeds in their investigation into a case against Mallya registered under the Prevention of Money Laundering Act (PMLA). Before he escaped from the country in 2016, he took loans from a consortium of banks but failed to repay. According to Mallya’s lawyers, the outstanding dues are worth Rs 6,203 crore.
Mallya’s lawyer informed the Court that the assets of the company are more than its liabilities. If the assets lying under the attachment with the ED are used, the company can be saved from winding up and also help banks receive their dues. He informed the Court that the banks have approached the Debt Recovery Appellate Tribunal with this prayer.
Vijay Mallya has offered to settle Rs 14,518 crore worth of liabilities owed by United Breweries Holdings Ltd. (UBHL) to a consortium of 14 banks. He said the insolvency and winding up laws are oriented towards keeping viable companies alive while ensuring that lenders are paid back.
UBHL, on Thursday, moved the Supreme Court (SC) against the Karnataka High Court's March 6 order that upheld the winding-up ruling passed in February 2018 as the company failed to pay admitted liabilities to its secured and unsecured lenders in line with corporate guarantees extended to now-defunct Kingfisher Airlines.