Diageo was forced to hold an emergency meeting over the weekend after the chairman of its Indian subsidiary, United Spirits, was accused of financial misconduct.
Vijay Mallya, the former majority stakeholder in United Spirits, was asked to step down by Diageo, which purchased 55 per cent of the company for £1.8bn last year. Mallya is alleged to have diverted funds from United Spirits to support his loss making Kingfisher airlines between 2010 and 2012.
The allegations came about as the result of an enquiry by United Spirits leading the current managing director Anand Kripalu to claim the board “lost confidence” in Mallya.
Kripalu then went on to say that “without making any determination as to fault or culpability” Mallya should “resign forthwith”.
But Mallya hit back, claiming the results of the enquiry were “half truths” and “twisted facts” saying Diageo never mentioned the issue during four months of due diligence prior to the transaction.