Vijay Mallya , under pressure from banks to repay loans, said he has every intention of honouring commitments, that he has made a new settlement offer to main lender State Bank of India and is hopeful of making quick progress on the matter, according to directors who attended a United Breweries Ltd (UBL) board meeting that he chaired by video-conference.
Even as the Enforcement Directorate is seeking to extradite him from the UK, where he’s been for the past two months or so, the chairman of UBL has the support of the board and strategic partner Heineken, said directors that ETspoke to.
The board meeting was held in Mumbai on Friday, with Mallya logging on remotely from London. “We expressed concerns over the various issues and Mallya has assured us that he is in serious negotiations with the banks to repay the loans as soon as possible.
He has said he is willing to return to India to answer all questions but he has to be assured of his safety and freedom,” said Kiran Mazumdar-Shaw , independent board member.
Performance of the company has been extremely good and there is no corporate governance issue that has impacted it owing to Mallya.” Mallya was unavailable for comment. Executives aware of the matter said Heineken has chosen to stand by Mallya and not go by unsubstantiated accusations.
Mallya has said he’s been constantly engaged in trying to settle dues and that he’s not guilty of any wrongdoing. Banks are seeking more than Rs 9,000 crore as dues on loans to Mallya-founded Kingfisher Airlines , which has been grounded since 2012. ED wants to question him over money laundering accusations.
Sunil Alagh, also an independent board member, said Mallya was seriously negotiating with banks. “Mallya told us he has been wrongly accused and has every intent to repay loans,” he said. “For now, the board stands by him and sees no corporate governance issues and would monitor progress until the next (board) meeting in August.”
There had been speculation that Heineken will take control of UBL and ask Mallya to step down as chairman. Heineken acquired a 37.5% stake in UBL in 2008 and has since increased this to 42.4%. The Dutch beer giant also appointed local investment bank JM Finance to buy shares from the open market, and has spent about Rs 179 crore on this so far. In March, Heineken acquired UBL shares from ECL Finance and private sector lender YES Bank .
Mallya told the board he had been wrongly accused of money laundering and there was no evidence to justify the allegations. He said he was willing to return immediately if he was assured of safe passage. “We all unanimously expressed our concerns to Mr Mallya and he told us that he is making serious efforts to repay the banks,” said CY Pal, independent board member.
He also told us he had tried to repay Kingfisher Airlines’ employee dues through United Breweries Holdings but was delayed since the Karnataka High Court has frozen accounts and assets.” He expressed his keenness to return to India if safe passage was assured, Pal said.
The next few months will throw light on the progress Mallya makes on his commitments until the next board meeting in August, he said.
The board also discussed the company’s performance, which has been positive, posting net profit of Rs 295 crore in FY16 on net sales of Rs 5,100 crore. UBL, which owns the Kingfisher brand, has a 50% market leadership in the beer market in India. Mallya seemed confident and unruffled as he chaired the meeting, executives said. The signing of documents was done by Pal, since Mallya is overseas.