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UB shareholders get ready to grill Mallya on Kingfisher

K. Giriprakash
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Cornered: Vijay Mallya, Chairman, UB Group
Cornered: Vijay Mallya, Chairman, UB Group

Will the king of good times have a smooth sailing, as in the past, when he addresses shareholders of his group companies at the annual general meetings this week or will they grill him on the state of Kingfisher Airlines that is threatening to impact other group companies too?

Till now, the shareholders’ demands at the AGMs have either been for a free health check-up at the Mallya Hospital in Bangalore or a crate of beer. However, this time round, things could get difficult for the UB Group Chairman, Vijay Mallya.

There has been talk of stakes in three group companies United Spirits, United Breweries and Kingfisher Airlines being up for sale. The fourth one, Mangalore Chemicals & Fertilisers, too has been in the news for a possible stake sale with a South-based group interested in buying it and only the valuation holding up the deal.

During the next four days of AGMs of UB Group' companies, the shareholders have their job cut out. They would surely want answers to the following questions:

1. Is it true that Diageo is in talks with United Spirits for picking up a 26 per cent stake?

2. Why is it necessary for the group to sell stake in United Spirits. Can’t the company be run without the stake sale?

3. If indeed the reports are true, who will address the next AGM of United Spirits – Mallya or some representative of Diageo?

4. Is there any truth at all about stake sale in United Breweries?

5. Was it necessary to double the salary of Kingfisher Airlines’ CEO Sanjay Aggarwal to over Rs 4 crore when several other employees of the airline have gone without pay for months?

6. Was the rise in oil prices the only reason for the airline going into a tailspin of losses? When the airline has hardly paid its dues to oil companies, how can increase in fuel costs be one of the main reasons for such huge losses?

7. The last and the most crucial: With stake sale in each of the major companies, will Mallya's hold on them diminish considerably and forever?

Tough questions. What remains to be seen is whether the shareholders will let Mallya off the hook this time as well, as they have done in the past.

When Vittal Mallya passed away in 1983, shareholders sprang a surprise and shocked those who were in the running by anointing Mallya's son, Vijay, all of 27 years, to the post of Chairman. After nearly three decades at the helm, Mallya owes it to his shareholders to come clean on what fate awaits his group companies.

giriprakash.k@ thehindu.co.in

(This article was published on September 23, 2012)
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