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The stock of Bank of Maharashtra may react negatively to a media report that the bank changed rules to lend more to United Breweries group, controlled by Vijay Mallya. The report quoting a whistleblower from the bank said the UB group company might have really raised money for the group’s struggling airline, Kingfisher. “The changes in terms, conditions and purpose of the loan are worrying. And BoM might well sanction further amounts.” Kingfisher has a debt of over Rs 7,000 crore and has not paid employees’ salaries for months. A UB Group spokesperson, however, asserted that there was no “practice of inter-company funds diversion,” the report clarified. It may be recalled that in a stinging report in September 2011 on Kingfisher Airlines, a Canadian investment research firm Veritas had come to the conclusion that both the airline and Mallya's holding company UB Holding (UBH) are effectively insolvent.
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