Mallya to chair United Spirits AGM amid revolt

Vijay Mallya is expected to chair the AGM of United Spirits today amid uncertainty over the billionaire’s continuing role at the Indian drinks group.

Vijay Mallya’s role of chairman at USL has been thrown into question in recent weeks

Mallya, chairman of Diageo-controlled United Spirits, will lead the meeting despite earlier reports that USL shareholders intended to vote on his continuing role at the group.

However, citing an unnamed source, Live Mint has now reported that the AGM may not be as dramatic as previously expected since Mallya’s role in “not on the agenda”.

In April this year, USL’s board of directors issued a vote of no confidence in Mallya and called on shareholders to remove the billionaire tycoon as the group’s chairman after he refused to step down voluntarily.

The board’s vote was cast following the outcome of an internal inquiry into USL’s finances, which saw £445m net loss in 2013/14.

USL initially attributed the decline to a significant write down of its Whyte & Mackay whisky business, purchased by Philippines-based spirits producer Emperador for an estimated £430m in May last year.

But the investigation suggested that between 2010 and 2013, a number of transactions at USL were “diverted” to other subsidiaries of its then-parent company UB Holdings, including Kingfisher Airlines, which was grounded in 2012.

Earlier this month, reports suggested that Mallya was in the final stages of negotiation with Diageo to sell his remaining 5% stake in USL to the UK drinks giant – a claim Diageo refused to comment on.

Diageo initially issued a statement claiming that it had “certain contractual obligations” to support Mallya in continuing as non-executive director and chairman.

Speaking after the publication of the publication of Diageo’s full-year 2014/15 financial results, the group’s CEO Ivan Menezes said USL’s board revolt had not affected its Indian operations.

The Spirits Business will report on the outcome of the AGM in due course.