The Hindu Business Line : HK court upholds Mallya role in SWC acquisition

A HIGH court in Hong Kong special administrative region has declared that two companies, which were nominees of the Golden Eagle Trust of whom Mr Vijay Mallya has control, were partners of the late Manu Chabbria and his investment company Keysberg in the acquisition of Shaw Wallace and Company in 1985.

Delivering the judgment on Thursday on a 12-year old suit filed by Alexina Investments Ltd and Soverign Nominees Ltd, the court directed the plaintiffs and the defendants to appear before it within six weeks for the remedies.

The respondents in the case included Mr Manu Chhabria, Keysberg and Jumbo International Holdings.

The suit stated that Mr Mallya's Amarante and Mr Chabbria's Keysberg were equal partners in Carrasco Investments Ltd, a corporate vehicle used for acquiring the liquor company from R.G.Shaw and Sime Darby for roughly $26million. The acquisition was funded through a $15-million loan from Amex and capital infusions to the tune of $4 million by Amarante and $7 million by Keysberg. However, trouble soon brew as CLB started investigating the deal following a formal complaint lodged by Mr S.P. Acharya, who headed SWC management at the time of the takeover. Soon after the commencement of investigation, the partners of the joint venture agreed that pending the investigation there should be a distancing of Mr Mallya and the UB Group from the joint venture and the business. Accordingly, a new joint venture between Alexina and Keysberg was signed.

Responding to the judgment, a SWC spokesperson said "Shaw Wallace or any other Jumbo Group Company in India is not party to this litigation nor are the management groups or any shareholder-on-record of any of these companies, a party to this dispute. Jumbo International Holdings, which is a defendant in this matter, is of the opinion that prima facie the judgement suffers from a number of infirmities and the same may have to be referred to a court of appeal for remedy. The judge has dealt with the case only in the context of his jurisdiction that is Hong Kong.

During the trial it was obvious that many acts of plaintiffs will clearly constitute criminal breach of the Indian Law. Those issues have not been dealt with."

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