NEW DELHI :  The Supreme Court ordered that status quo must be maintained on Diageo Plc-United Spirits Ltd deal and that the company court would continue hearing the petitions seeking winding up of UB group companies for paying dues to lenders.

A bench headed by Justice A.K. Patnaik said the case will now be heard in April and issued notices to over 20 lenders led by the State Bank of India seeking their response to the petitions of United Breweries Holdings Ltd and Diageo Plc.

Counsel for SBI alleged on Monday in the court that there was “gross under-valuation” of shares of United Spirits in the deal with Diageo. Industrialist Vijay Mallya-led United Breweries Holdings Ltd and UK distiller Diageo Plc had moved the apex court challenging Karnataka High Court’s Dec 20 decision that held United Spirits’ shares sale to Diageo as null and void in view of the winding up petitions pending against United Breweries.

Diageo Plc has claimed that it bought shares in United Spirits after securing all the required clearances from Reserve Bank of India, Securities and Exchange Board of India, Competition Commission of India and other bodies, and its investment of over 15 bln rupees will “go down the drains” if the high court order is not overruled.

BNP Paribas, a lessor of grounded Mallya-led Kingfisher Airlines, had filed a winding-up petition against United Breweries in November last year following default in payment.

At the time of the filing of the winding-up plea, Kingfisher Airlines owed over 1.46 bln rupees to BNP Paribas. The airline owes around $2.5 bln to banks, airport operators, and other creditors. A consortium of 15 banks, led by State Bank of India, is trying to recover dues through sale of available collateral.    -Cogencis

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