Shareholders re-elect Mallya as chairman of United Spirits

Vijay Mallya, UB Group chairman, has retained his post as chairman of United Spirits with a majority of the shareholders voting for his reappointment at the annual general meeting on Tuesday.

According to the e-voting pattern, Mallya seems to still enjoy the confidence of his shareholders even though he owns a mere 3.3 per cent in the company. The result of the voting will be formally announced in a couple of days. According to sources in the company, the majority of the shareholders used electronic voting to cast their votes.

The latest annual general meeting of USL held on Tuesday was keenly watched because auditors had earlier pointed out several discrepancies regarding disclosures by the company management in their notes to annual results. Diageo, which owns 54.78 per cent stake, has ordered a complete investigation into these issues, some of them involving loans provided to UB Holdings. A proxy advisory firm had also suggested that shareholders vote against Mallya’s reappointment at the AGM.

Mallya was also under a cloud following some lenders declaring him a wilful defaulter, though he has got a stay order from the high courts in Kochi and Kolkata recently.

In his speech to shareholders, Mallya said he had been wrongly accused as being a wilful defaulter even though as per the RBI’s definition, only someone who siphons off funds raised from lenders can be slapped with such a tag.

He also accused the media of trying to present a picture of a rift between the UB Group and Diageo, which owns United Spirits, following the setting up of an investigating team. He said the probe has been ordered by the company to seek clarifications on the issues raised by the auditors of USL. The AGM was held at UB City, where the USL’s head office is situated.

On the issue of Kerala gradually moving towards prohibition, Mallya said the decision was not a well-thought-out move. He said Andhra Pradesh and Haryana had, in the space of two years, repealed prohibition citing their inability to check illicit distillation and smuggling from other States.

Mallya said the Government should include alcohol in the Goods & Services Act as some States “seem disinclined to have the federal Government dip into what they see as their honey pot.” The truth is that the fiscal control of the States on this sector will continue unhindered in a post-GST scenario, he said.