Bangalore : In a major setback for liquor baron Vijay Mallya, the Karnataka High Court on Friday struck down as “null and void” the sale of shares of United Breweries Holdings Limited’s (UBHL) United Spirits Limited to UK-based spirits giant Diageo.
A Division Bench comprising Justices N Kumar and Rathnakala said the deal is void until a conclusion is reached on the winding up petitions against UB Holdings.
In its order, the court asked Diageo to return the shares bought from UBHL as Mallya and his company is mired in a whirlpool of winding-up petitions by creditors, who are seeking recovery of unpaid dues of close to Rs 600 crore.
Just last month, in a move that raised eyebrows, Diageo had picked up more than 19 lakh shares of United Spirits for over Rs 472 crore.
In a swift reaction, UBHL said it would go through the judgement copy and decide on options to move the Supreme Court against the High Court order.
Certain companies, including corporate banker BNP Paribas, which are creditors to UBHL, had filed petitions in the High Court seeking its winding up as the holding company was unable to pay its debts. On December 16, the High Court had dismissed an appeal filed by UBHL against the winding up petition by BNP Paribas for “lack of merits.”