The Debts Recovery Tribunal-Karnataka on Wednesday temporarily restrained the Unit Trust of India Investment Advisory Services Limited (UTI-IASL) and the Standard Chartered Bank (SCB) from handing over 2,09,50,954 equity shares of United Breweries Ltd (UBL), held by Vijay Mallya and his son Siddharth Mallya, to Diageo PLC or any other entity except a consortium of banks led by the State Bank of India (SBI).
The tribunal passed the interim injunction on an application filed by SBI and other banks complaining that attempts were being made to transfer the equity shares in violation of an undertaking given to the tribunal by Kingfisher Airlines Limited (KAL), UBL and Mr. Mallya to not transfer, alienate or otherwise deal with their assets.
In their application, the banks led by SBI banks alleged that SCB and the UTI-IASL are in the process of transferring 1,04,86,666 equity shares of UBL held by Mr. Mallya and another 1,04,64,288 equity shares held jointly by Mr. Mallya and his son Siddharth to Diageo PLC.“Diageo PLC, being one of the guarantors to the loan facilities provided by SCB to Watson Limited, has agreed to repay the entire outstanding due to SCB subject to transfer of aforementioned shares to Diageo PLC,” the banks contended while pointing out pledging of these shares to SCB by Mr. Mallya itself was illegal.
Pointing out that the total value of 2,09,50,954 shares, at the rate of Rs.1005.65 per UBL share, would be around Rs. 2,106,93,26,890, the banks expressed “suspicion” on the attempt to transfer all these pledged shares when the total outstanding to SCB is only Rs. 850,84,78,526.
