The Diageo-controlled United Spirits (USL) today announced the appointment of M K Sharma as its new chairman, a day after the embattled liquor baron Vijay Mallya resigned from the post.
"Following Dr Mallya's resignation, the board of directors of the company is pleased to announce that Mahendra Kumar Sharma, Independent Director and Chairman of the Audit Committee, has been appointed the chairman of the board with effect from February 25, 2016," USL said in a BSE filing.
Mallya's exit from the board of United Spirits ended a long-drawn tussle between him and the majority owner, UK's Diageo, following allegations of irregularities on loans given to UB Group companies.
Mallya said in a statement announcing his departure from the company, "The time has now come for me to move on and end all the publicised allegations and uncertainties about my relationship with Diageo and United Spirits Ltd. Accordingly, I am resigning from my position with immediate effect." He further said: "I am pleased to have been able to agree to terms with Diageo and USL. The agreement we have reached secures my family legacy." Mallya will have the honorary title of founder emeritus, USL.
USL MD and CEO Anand Kripalu said: "The agreement reached today is valuable to USL and all its shareholders. It also brings to an end the uncertainty relating to the company's governance. This will allow the company to prosper and build on the great platform that we have already created in this exciting market." On his future course of action, Mallya, who agreed to a global 5-year non-compete arrangement with Diageo excluding the United Kingdom, said: "Having recently turned 60, I have decided to spend more time in England, closer to my children." The development follows three state-owned banks - Punjab National Bank, United Bank and SBI - declaring him, his group holding company United Breweries Holdings Ltd and the long-defunct Kingfisher Airlines as wilful defaulters.
A bank consortium led by SBI has decided to auction Kingfisher House in Mumbai on March 17 this year to recover a part of the Rs 6,963 crore dues from Kingfisher.
Last year, Diageo had asked Mallya to step down as the chairman and director of USL, alleging funds diversion to Kingfisher and other UB group entities, a demand he had rejected outright.
USL had said in a report by PwC that "various improprieties and legal violations" were found in a probe into loans worth Rs 1,337 crore given to UB Group firms.
USL is now controlled by the world's largest spirits maker Diageo, which had acquired an additional 26 percent stake in USL for Rs 11,448.91 crore in July to take its total share in the Indian firm to 54.78 percent.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!