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Jul 17, 2017 05:30 PM IST | Source:

Diageo not to pay remaining $35-m settlement to Mallya, seeks to recover dues

Diageo is looking to recover dues from Mallya, including USD 135 million given as conditional guarantee to Standard Chartered Bank for the liabilities of Watson

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In yet another blow for former liquor baron Vijay Mallya, Diageo has decided to hold back USD 35-million settlement out of the total USD 75 million that the company had agreed to pay him, reports The Economic Times.

Diageo, the world’s largest liquor company, is instead seeking to recover dues from Mallya, including USD 135 million given as conditional guarantee to Standard Chartered Bank for the liabilities of Watson. Diageo would also claim Mallya’s stake in the Force India Formula One team, which was pledged as security for Watson.
Sources quoted in the Economic Times report, said that the remaining USD 35 million will not be paid as the British company found various financial misappropriations and fund diversion by Mallya.

Vijay Mallya received USD 40 million last year from Diageo after he agreed to walk away from United Spirits. The balance was to be paid by Diageo in two equal instalments.

When Diageo acquired control of USL in 2012, it issued a guarantee to Standard Chartered against Watson’s debt to release USL stock that was to be acquired as part of the deal.

Vijay Mallya has remained out of the country even after being asked to appear for questioning for diversion of loans that have not been repaid after the Kingfisher Airlines failure.

Multiple complaints were filed against Mallya by the Indian unit of the global liquor maker after inquiries revealed “improper transactions” amounting to Rs 1,225.30 crore, which was diverted to companies located in tax havens where he holds direct or indirect interest.
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