Diageo to chase Indian tycoon and former United Spirits chairman Vijay Mallya for £138m in "improper transactions"

 
Francesca Washtell
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Hey big spender: Vijay Mallya is known for his expensive lifestyle (Source: Getty)

Diageo is pursuing Indian business tycoon Vijay Mallya to recover an estimated 12bn rupees (£138m) in funds it claims were stolen from its subsidiary United Spirits between 2010 and 2014.

The drinks company said in a weekend notice to the Bombay Stock Exchange that an investigation had uncovered "improper transactions" during Mallya's time as chairman.

"These improper transactions identified in the inquiry involved, in most cases, the diversion of funds to overseas and Indian entities that appear to be affiliated or associated with United Spirit Limited's former non-executive chairman Dr. Vijay Mallya," the company said.

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Mallya has previously been accused of diverting funds from United Spirits to support his loss-making Kingfisher Airlines between 2010 and 2012, though the most recent investigation suggests that other companies could have benefited from fund diversions, including his Formula One racing team Force One, as well as other subsidiaries.

In February, Diageo agreed to pay him £53m to step down as chairman of the company's Indian arm, after a protracted battle in which Mallya initially refused to resign.

Diageo purchased 55 per cent of the company for £1.8bn in 2014, upping its holdings from a 28 per cent share.

The Smirnoff and Johnnie Walker-maker is the latest group to pursue Mallya for misplaced funds.

In March, he had to vigorously defend himself from claims he had become one of the world's most impressive absconders, after the Indian Supreme Court claimed he had flown out of India to London leaving £1.08bn worth of debt in his wake.

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