Liquor company Diageo Plc will hold back $35 million (around Rs 225 crore) of the $75 million (Rs 483 crore) it had agreed to pay businessman Vijay Mallya as part of a settlement after he resigned as the chairman of United Spirits, two executives told The Economic Times.
The company had paid him $40 million (around Rs 257 crore) in 2016. It was supposed to pay the remaining $35 million in two equal installments over the next few years.
“The decision to not honour the deal signed with Mallya is also on account of charges of various financial misappropriations from USL and fund diversion by him,” the executives told The Economic Times.
Instead, Diageo will now try to recover its dues from Mallya. These include Mallya’s stake in the Force India Formula One team, which had been pledged as security for Watson Ltd, a company affiliated with the beleaguered businessman.
The dues also include the $135 million (around Rs 869 crore) Diageo had given Standard Chartered Bank as a conditional guarantee for Watson’s debts, according to the report.
The alcoholic beverages company, however, has declined to comment on its move to withhold its payment to Mallya, who has not commented on the development either.
The Indian unit of Diageo had filed multiple complaints against Mallya after inquiries uncovered improper transactions worth Rs 1,225 crore.
India has been trying to have Mallya extradited from the United Kingdom. On June 14, the Supreme Court had adjourned a trial against him in a contempt of court case, after the Centre said it could not extradite him before January 2018.