USL seeks Sebi help on Mallya-related transactions

BENGALURU: Diageo-owned United Spirits has approached market regulator SEBI seeking a “clarification/direction” on a slew of third party monetary agreements signed between the company and its former owner Vijay Mallya.
This unprecedented move by USL’s new management comes after the company’s minority shareholders rejected the continuation of nine such agreements two months ago, at an extraordinary general meeting in Bengaluru.
Some of these monetary agreements include: a loan agreement between USL and UB Holdings, which is Mallya’s investment and holding company; sponsorship agreements with United Racing & Bloodstock Breeders and United Mohun Bagan Football Team; aircraft service agreement with UB Air Private Ltd; and a contribution agreement with Vittal Mallya Scientific Research Foundation. In its October to December quarter financial results filing to the stock exchanges, USL said, “The company has sought clarifications/directions from SEBI with respect to the implications of the non-approval of the aforesaid agreements by the shareholders of the company.” USL said, pending clarification, it will only recognize expenses relating to these monetary agreements up to November 28, 2014, or the day of the EGM. In the just concluded third quarter, USL has provisioned Rs 36.92 crore for eight of these monetary agreements and Rs 130.39 crore for the April to December 9-month period.