New Delhi - Finding prima facie evidence of non-compliance to various norms, including on insider trading and corporate governance, the Securities And Exchange Board of India(SEBI) has widened its probe into dealings of Vijay Mallya-led UB Group, including in its own shares and with UK-based Diageo and other foreign players.
The capital markets watchdog may also seek information from other regulators in India and abroad, as also from the stock exchanges, as it seeks to de-clog the complex transactions Mallya had entered into, including for sale of stake and transfer of rights in his various group companies.
"Details and clarifications have also been sought from all the concerned parties including the present and erstwhile UB Group firms as well as from the foreign companies with whom Mallya had dealt with for sale of controlling stake in United Spirits Ltd to Diageo," a senior official said.
SEBI began looking into Mallya-Diageo transactions last month soon after the flamboyant businessman inked a Rs 515-crore 'sweetheart deal' to exit United Spirits, suspecting possible violations of corporate governance and other norms.
Regulatory sources said that SEBI has found prima-facie evidence of non-compliance to various transactions, while it has also stepped up its cooperation with other regulators and agencies that are separately looking into alleged violations in relation to the massive loans taken by the erstwhile Kingfisher Airlines of UB Group.
A huge controversy cropped up after Mallya left India within days of his 'exit deal' with Diageo, which has already paid more than half of the total amount it has to pay to the businessman, who has been known as 'King of Good Times'.
Detailed queries sent to Mallya, including about his possible return to India and also on the prima-facie evidence found by SEBI, did not elicit any response.
SEBI is looking into the role of United Spirits and its main promoter Diageo Plc, as also that of Mallya and his group firms that are or have been shareholders in India's leading liquor maker.
Besides, the regulator is also looking into the trading data for USL shares to check whether there have been any violation of insider trading norms or other irregularities.
The Corporate Affairs Ministry and others may also join in as the deal raised "serious doubts" about whether the corporate governance norms have been followed in "letter and spirit" in this matter. The Serious Fraud Investigation Office (SFIO) is already separately probing Kingfisher for alleged financial irregularities and fund diversion.
The ambit of the probe by various regulators and agencies also includes the alleged financial irregularities at USL relating to loans advanced to UB firms including for long-defunct Kingfisher Airlines.
Besides, various UB Group firms are facing probes by SEBI relating to listing rule violations, while Corporate Affairs Ministry is also looking into alleged violations of certain provisions of the Companies Act. The role of certain auditors is also under the scanner.
Also under the scanner are financial transactions entered into by USL, Mallya and various UB Group firms with entities abroad, including those before Diageo buying into the company.
Some of these deals relate to various sporting ventures floated by Mallya including for cricket and Formula One race. Recently, he also ventured into Caribbean Premier League.
Mallya, who has been known for his flamboyance and used to be referred to as 'King of Good Times' before his empire ran into troubles beginning with collapse of Kingfisher Airlines, managed a good deal last month to end a year-long boardroom battle at USL, wherein he had sold controlling stake to Diageo in a multi-billion dollar deal.
Such an exit arrangement is commonly known in the business parlance as 'golden parachute' or 'sweetheart deal'.
Mallya, who along with his group firms is fighting 'wilful defaulter' tags given by various lenders in relation to loans taken by long-defunct Kingfisher Airlines, had said he would now "spend more time in England" closer to his children.
Diageo had said Mallya will have no "personal liability" to the UK-based company in relation to the findings of the alleged financial irregularities at the company that had triggered an acrimonious fight between them.
Last year, Diageo had asked Mallya to step down from USL alleging fund diversion to Kingfisher and other UB group entities, a demand he had outrightly rejected.
Diageo is the majority shareholder of USL with a 54.78 per cent holding, excluding the 2.38 per cent owned by the USL Benefit Trust.
Mallya personally held a small stake of 0.01 per cent in USL at the end of December 2015, while his group firms owned further 3.99 per cent stake. However, more than half of these shares are pledged with banks.