Even as the possibility of embattled industrialist Vijay Mallya voluntarily returning to India looks dim, United Breweries (UBL) has “convinced” him to step down from the company board and propose a successor.
A report in the Economic Times says, quoting sources, that the liquor baron is expected to issue a successor by the year-end, a move that allow UBL to comply with SEBI regulations, which bar willful defaulters from holding directorships in a listed company.
As per the agreement signed between Diageo, joint venture owner in UBL, and Mallya, the latter is entitled to be UBL’s chairman for life and remain a non-retiring director, unless he nominates someone to replace him or voluntarily steps down. It added that UBL has, for now, nominated CY Pal, one of the directors, as acting chairman.
Neither Mallya nor Heineken responded to ET's queries.
Mallya had earlier rejected a request from UBL to quit the board following the Sebi directive barring him from the securities market and holding any directorships or other key managerial positions.
Mallya last chaired a board meet at UBL in November 2016 by video conference from London. The company has stopped sharing confidential information with him.
Born to industrialist Vittal and Lalitha Mallya in 1955, Mallya junior took over the reins of the company as UB Group's chairman in 1983 after his father died. Once known as "India's Richard Branson", he was famous for his extravagant lifestyle and niche taste.
In 2005, he expanded into aviation sector and launched a full-service carrier Kingfisher Airlines (KFA). However, his downfall began in 2012 when the airline, burdened by a debt of over Rs 7,000 crore, was grounded.
Failing to contain the fallout from the Kingfisher default, Mallya had to bring in foreign partners for each of the UB Group’s two crown jewels: Diageo for United Spirits and Heineken for UBL.
Since then, his slide further has been swift. He left the country last year, on a diplomatic passport (he was a Rajya Sabha MP then), after which he was declared as absconding.
Recently, Mallya was arrested in London twice but he got bail within few hours of the arrest and the case is still on.
But should he step down as UBL chairman, it would cut off probably one of the last links he has with the UB Group, the sprawling liquor behemoth he inherited from his father, and which he took to dizzying heights before have to give up on it.
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