Heineken seeks legal advice on appointing United Breweries chairman: Report
Heineken is believed to be in talks with absconding businessman Vijay Mallya on his role as UBL's chairman.
July 17, 2018 / 04:08 PM IST
Dutch beer-maker Heineken has sought legal advice on appointing a chairman at United Breweries, according to an Economic Times report.
Heineken is the majority shareholder of United Breweries Ltd (UBL) and owns 43 percent in the Indian company.
The Amsterdam, Netherlands-headquartered firm is believed to be in talks with absconding businessman Vijay Mallya on his role as UBL's chairman.
Moneycontrol could not independently verify the report.
The shareholder agreement between Heineken and Mallya allowed the latter to remain as chairman and a non-retiring director. The company and some of its advisers believe that the shareholder agreement has become null and void, since the Enforcement Directorate (ED) has commenced legal action against the owner of the now defunct Kingfisher Airlines.
Mallya may have to either step down or nominate another candidate to replace him.
The UBL board had asked Mallya to step down last year after the Securities and Exchange Board of India (SEBI) prohibited willful defaulters from holding key board positions.
Mallya, then said that he would work on it in December 2017, but failed to take any action. The delay has upset Heineken and UBL officials, the report claimed.
For nearly a year, an acting chairman has been in charge of board meetings.
"The company is functioning well and operations are in good shape…but it is not good corporate governance to have an acting chairman for so long," a company board member was quoted as saying by the paper.
The last time Mallya chaired a UBL board meeting was in November 2016. The company has since then stopped sharing confidential information with Mallya.
The ED currently holds 16.15 percent stake in UBL, a share that was previously held by Mallya.