Vijay Mallya in trouble as Diageo to hold back $35 million payment

Solenn Plantier
Juillet 17, 2017

Are bad times awaiting the "King of good times"?

Trouble mounts for businessman Vijay Mallya as the world's largest liquor company, Diageo Plc has allegedly chose to withhold the remaining $35 million of the $75 million amount the company had agreed to pay him.

Diageo will now seek to recover dues from Vijay Mallya, ET reported.

Diageo, the world's largest liquor company, is instead seeking to recover dues from Mallya, including Dollars 135 million given as conditional guarantee to Standard Chartered Bank for the liabilities of Watson.

Sources quoted in the Economic Times report, said that the remaining Dollars 35 million will not be paid as the British company found various financial misappropriations and fund diversion by Mallya. Rs 225 crore) of the $75 million (approx.

The former liquor baron is now out on bail.

In 2012, Diageo, the maker of Johnnie Walker scotch and Smirnoff vodka, bought a 55 per cent stake in United Spirits for $3.2 billion, the largest food-and-beverage transaction in Indian history. The balance was to be paid by Diageo in two equal instalments.

Multiple complaints were filed against Mallya by the Indian unit of the global liquor maker after inquiries revealed "improper transactions" amounting to Rs 1,225.30 crore, which was diverted to companies located in tax havens where he holds direct or indirect interest.

The report said that the private shareholder agreement between Diageo and Mallya previous year was subject to several clauses and the payout was to be made in three tranches. Diageo has been criticised for giving Mallya a sweet deal despite the USL board's complaints over initial findings that he had violated several laws.

Further, the Enforcement Directorate registered a criminal case in this matter previous year under the Prevention of Money Laundering Act and has attached assets worth over Rs 9,600 crore till now.

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