United Spirits has received a notice from the Ministry of Corporate Affairs (MCA) asking why action should not be taken against current and (some) former directors of the company for certain violations.
United Spirits, now owned by the London-based Diageo, in its note to the accounts for the third quarter, said it received a notice from the MCA on January 11.
The notice sought its comments on why action should not be initiated against the company, its directors and certain former directors for contraventions under provisions of Section 206(5) of the Act. “The company is in the process of responding to this notice,” USL said in a statement.
USL had also received letters from the National Stock Exchange and the Institute of Chartered Accountants of India earlier seeking details on the qualifications raised by the statutory auditors.
The company has also received a request from the Enforcement Directorate seeking information on its present and former joint ventures and wholly owned subsidiaries abroad.
USL’s probe report, released last year, had found that between 2010 and 2013, funds from the company were diverted to many subsidiaries, including Kingfisher Airlines, in violation of the Companies Act, 1956.
Quarterly resultsUnited Spirits’ net profit sank 45 per cent to ₹40.95 crore for the third quarter of this fiscal year on account of certain provisions for loans and advances.
Revenue rose 22 per cent to ₹2,650.58 crore.
“The Diageo brand portfolio integration (is) positively impacting both top line and operating margins.
“Our focus on reducing debt continues with a 27 per cent reduction in our net debt in the nine-month period (₹1,400 crore), driven by our non-core asset divestment strategy and the continued positive cash flow from operations,” said Anand Kripalu, CEO.