Mallya refutes USL's allegations on fund diversion

A day after United Spirits disclosed Rs 1,225 crore fund diversion by the erstwhile promoters to entities linked to Vijay Mallya, the embattled businessman today said all transactions were “legal and above board” and the company was now making “unfounded allegations”.

He said that Diageo, to whom Mallya-led UB Group had sold majority control in United Spirits Ltd (USL) in 2013, had conducted an extensive due diligence before buying the shares and it was “surprising and unfortunate” that these allegations were being made now.

“I have absolutely no knowledge about this purported enquiry by E+Y nor the suggested allegations. Surprisingly neither USL nor E+Y have given me any details of the allegations or any opportunity to respond,” Mallya said in an emailed statement sent though his public relations manager.

“I can only reiterate that all transactions were legal, above board and approved by USL Auditors, the USL Board and shareholders. Over and above this Diageo conducted an extensive due diligence on USL prior to acquiring shares. It is surprising and unfortunate that unfounded allegations are now being made without any reference to me whatsoever,” he said.

In a stock exchange filing yesterday, USL had disclosed fund diversion and improper transactions worth Rs 1,225.3 crore involving entities linked to Mallya, including Kingfisher Airlines and his Formula One team.

The company also made it clear that the earlier settlement reached with the Indian businessman would not absolve him of the claims arising out of the latest findings of an internal ‘Additional Inquiry’.

While USL did not name ‘E+Y’ among those that conducted the enquiry, it said that the company’s CEO had engaged “independent experts with specialised forensic skills” to assist in the inquiry and provide inputs and expert advice.