In a major jolt to liquor baron Vijay Mallya, the Karnataka High Court on Tuesday ordered the winding up of United Breweries (Holdings) Ltd (UBHL), the parent company of the UB Group, for recovering dues payable by UBHL-promoted defunct Kingfisher Airlines Ltd.
A report in The Indian Express said it is the change in stance of United Spirits on the liquidation that could have facilitated the court's order.
"This court has come to a conclusion that the respondent company UBHL deserves to be wound up for failure to discharge their duties to pay up their creditors," Justice Vineet Kothari said in his order allowing petitions by banks and aircaft lessors.
Justice Kothari of the Dharwad Bench of the High Court pronounced the order through video conferencing.
The creditors including BNP Paribas, the lead petitioner, State Bank of India and aircraft lessors and engine makers such as Rolls Royce and IAE had moved the court to get back their dues of Rs 146 crore.
The judge said the assets of the respondent company cannot be left under the control of UBHL and could be handed over to official liquidator to achieve the winding up process as per the law.
"The assets whatever are left now cannot be left under the control, possession and management of the respondent company, and if necessary could be handed over to official liquidator to proceed further until winding up of the respondent company is achieved in accordance with the law," he said.
The lenders to Kingfisher Airlines filed the case against UBHL seeking dues from the now defunct airline. UBHL had given corporate guarantees for loans to run Kingfisher, which has virtually caused the collapse of Mallya's liquor empire.
Mallya owns a 52.34 percent in United Breweries Holdings Ltd.
The report in The Indian Express, the official liquidator has been asked to file a status report on the proceedings towards liquidation of the company in four weeks.
The report also said that the order to wind up the company was facilitated by the change in the stance of the United Spirits, a company Mallya sold to Diageo in 2012, which was earlier opposed to the liquidation.
Commenting on the change in position by United Spirits, the court reportedly observed that “something seriously wrong has taken place in the Respondent – Company’s Management and affairs, where it has been unable to perform its contractual obligations even towards its own group’’.
Justice Kothari also disposed of all Interlocutory Applications filed by UBHL.
The latest blow to the liqour baron comes after a CBI court last month issued a non-bailable warrant against him in the Rs 720-crore IDBI Bank loan default case as the agency sought his extradition from the UK.
Earlier, the Debt Recovery Tribunal here had ordered the SBI-led consortium of banks to start the process of recovering over Rs 6,203 crore, at 11.5 per cent annual interest rate, from the embattled tycoon and his companies in another Kingfisher Airlines case.
With inputs from PTI
Updated Date: Feb 08, 2017 09:54 AM