The Karnataka High Court on Tuesday ordered the winding up on United Breweries Holding Limited, the holding company for litigious businessman Vijay Mallya’s United Breweries and his defunct airline Kingfisher. The court said the company should be wound up for failing to to pay its creditors despite receiving several notices. The court said the debt is far greater than the company’s net worth and assets, and that it should be handed over to the official liquidator, The Times of India reported.
The court also said that if the company could prove that it could pay the creditors amicably, it should submit a proposal to the effect to the bench, even if the winding up procedures have begun. The court criticised the management of UBHL, saying it did not seriously try to fix its problems.
Several lenders, including a consortium of banks led by the State Bank of India, BNP Paribas and several foreign suppliers of aircraft parts had moved court against UBHL, saying the company owed nearly Rs 5,000 crore in loans.
On January 31, the Central Bureau of Investigation court had issued a non-bailable warrant against Mallya and is trying to have him extraditing from the United Kingdom, where he is believed to be living at the moment. On January 23, the Securities and Exchange Board of India had banned Mallya and six others from trading in the securities market in connection with the funds diversion case. The regulator said that funds for United Spirits Limited were diverted to other United Breweries companies, including Kingfisher Airlines.
In November 2016, Mallya was declared absconder by a special Prevention of Money Laundering Act court. On November 8, 2016, India had asked the United Kingdom, where Mallya has been residing, to extradite the industrialist under the Mutual Legal Assistance Treaty as he is owes around Rs 9,000 crore to 17 banks in India.
Mallya left the country on March 2 and has been in the United Kingdom since then. He had claimed he was in “forced exile” and that he could not return to India.