In an irony of sorts, self-proclaimed ‘King of Good Times’ Vijay Mallya today saw shares of his various group companies soar higher even as fresh troubles surfaced in form of the group’s holding entity being slapped with yet another ‘wilful defaulter’ tag.

This came a day after Mallya having to quit top posts at two group companies — Mangalore Chemicals & Fertilisers Ltd (MCFL) and long-grounded Kingfisher Airlines.

While most analysts have long stopped covering UB stocks due to continuing troubles at various group companies and lack of liquidity, they were also taken by surprise to see a sudden spike of up to 20 per cent in their share prices today.

Some of them said investors might be seeing the developments as a beginning of the endgame for Mallya, who no more has controlling stakes in United Spirits and United Breweries Ltd and his exit from MCFL and Kingfisher could leave UB Holdings Ltd (UBHL) as the only major entity where he may still have a significant role.

A few other analysts, however, said that the spike in UB group stocks could be like a ‘dead cat bounce’, which speculators might use to exit from their long-held positions.

The latest round of problems began last week with the minority shareholders of United Spirits Ltd (USL) trouncing proposed financial dealings of the company with its erstwhile promoter Mallya, who remains its Chairman as of now.

USL’s controlling shareholder Diageo is mulling over ways to take forward the matter after an unprecedented activism on part of investors to reject a proposal involving business transactions between existing and erstwhile promoters.

In another unprecedented setback, Mallya’s re-appointment as Managing Director of Kingfisher Airlines has been annulled by the government, while he had to quit on his own from the board of MCFL yesterday.

The problems are expected to grow further as several banks, including state-run SBI, are believed to have written to the boards of various UB group firms that no further loans would be provided to them in the wake of defaults made by Mallya and his group companies.

A senior banker said the loans availed by almost all UB companies indicated a complex web of transactions, where one entity was guarantor for the other and the second one took loans on the basis of guarantees given by yet another entity from the group or from among the promoters.

Notwithstanding the mounting troubles for the group, its holding company UBHL saw its share price surge by 19.80 per cent to close at Rs 23.90 on the BSE.

McDowell Holdings also rose by 19.93 per cent to Rs 34.30, while United Breweries climbed 8.11 per cent to Rs 825.65. United Spirits Ltd gained 7.14 per cent to Rs 2,913.

Shares of Pioneer Distilleries were also up 5 per cent.

Trading in shares of two companies — Kingfisher and UB Engineering — got suspended yesterday due to their non-compliance to listing agreement norms.

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