Court allows Diageo Holdings Netherlands BV intervention application in Vijay Mallya assets case
British group seeks dismissal of lenders’ request to liquidate assets, says they are part of judicial hearings
The British spirits maker that has majority stake in United Spirits (formerly owned by Mallya) also sought dismissal of a request by the consortium of lenders led by SBI to liquidate the assets, saying the property mentioned is a part of various judicial hearings.
The official liquidator (OL) appointed by the Karnataka High Court said, “If the properties of UBHL are restored to applicants, other creditors would suffer grave irreparable loss, harm and injury-...If it is refused, applicants will not suffer any harm as their interests will also be safeguarded by the OL of Karnataka High Court.”
“The interest of all the creditors, workmen and other stakeholders in UBHL can be best safeguarded if the official liquidator undertakes control of the affairs of UBHL and winds up the company according to the provisions of the Companies Act,” it said. “...at present there are several creditors (including workmen and financial institutions) of UBHL other than the applicants who have substantial and legitimate interest in the proceeds of the properties belonging to UBHL, including movable and immovable properties worth approximately `5,000 crore.”
Confiscation plea adjourned
The court also allowed an adjournment application filed by Mallya through his counsel against the Enforcement Directorate (ED) plea to confiscate his properties under the newly enacted Fugitive Economic Offenders (FEO) Act, 2018. The matter will now be heard on April 8.
Mallya argued that his plea against the PMLA court declaring him fugitive is pending before the Bombay High Court. He also said properties whose restoration has been consented to by ED are included in the list of properties that ED now wants to confiscate.
Special Judge M Salman Azmi, while allowing Diageo’s intervention plea, observed, “The applicant intervenor for the first time has entered in the proceedings in the properties in which he claims having interest... Therefore as there are multiple litigations concerning the properties at different forums...also before the Karnataka HC…it would be proper to offer an opportunity to the intervenor applicant to present his case. It would not cause any prejudice to the right of the previous applicant (consortium of banks led by SBI)...petition needs consideration, application has been allowed.”
Diageo also said pledged shares do not form a part of the security obtained by the applicants (banks) at the time of granting the loan to Mallya and/or his companies, nor does it form part of the security package set out in the documents disposed by the applicants through corporate guarantee dated December 21, 2010. Banks told the court they are not consenting to Diageo’s plea, and their objection should be recorded.