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Diageo sues Vijay Mallya for US$180m
Diageo is suing former United Spirits chairman Vijay Mallya through the High Court in London for at least US$180 million.
Diageo has launched legal action against Vijay Mallya with the UK’s High Court
As previously reported by The Spirits Business, Diageo is pursuing a repayment of US$40m from Mallya, which the UK drinks group paid to him as a lump sum as part of a severance packaged agreed in February 2016.
UK drinks group Diageo agreed to pay Mallya a US$75 million in total to “bring to an end the uncertainty relating to the governance” of its Indian drinks subsidiary United Spirits.
Under the terms, Mallya immediately received US$40m, and was due to receive the remaining balance paid in equal instalments of US$7m over five years, which Diageo has withheld.
The group argues that Mallya has breached the agreement, and is therefore seeking compensation for alleged “losses”.
In documents announcing its full-year 2016/17 financial results, Diageo said an “additional inquiry” – following one conducted in 2014 – discovered “diversion of funds” to Indian and non-Indian entities in which Mallya had an interest, including his grounded Kingfisher Airlines and racing team Force India Formula One.
In this latest lawsuit with the High Court in London, Diageo is also seeking payment of US$141, which the group claims it is owed by Watson Limited, a company affiliated with billionaire Mallya.
“As previously disclosed, Diageo is pursuing substantial repayment and compensation from Dr Vijay Mallya and certain of his affiliate companies,” a spokesperson for Diageo said.
“The matters giving rise to these claims were clearly set out in our 2017 annual report as well as prior disclosures.
“They include seeking compensation from Dr Mallya for breaches of the agreements announced in February 2016 that ended his association with United Spirits Limited, including seeking repayment of the US$40m previously paid to him under that agreement.”
“In addition there are claims of approximately US$141m for sums owed by Watson Limited, a company affiliated to Dr Mallya, as well as related claims in respect of security granted by Dr Mallya and certain other parties in respect of those dues.
“Diageo confirms that it has now issued legal proceedings in the High Court in London against Dr Mallya and certain of his affiliates in respect of these matters.”