Vijay Mallya is now being sued by Diageo PLC, the latest in a series of cases and investigations against the former chief of Kingfisher. Liquor giant Diageo had acquired 55% stake in Mallya’s company United Spirits in 2012.
Diageo filed the suit against Mallya in London on Tuesday, Mint reported. The company is suing him for alleged breach of contract and to recover a $40-million (Rs 259 crore) payout he had received before stepping down as United Spirits chief in February 2016. The $40 million was part of a $75-million (Rs 487 crore) payout package. After stepping down in February 2016, Mallya had immediately left for the United Kingdom, where he has been since. He has defaulted on loans worth Rs 9,000 crore to 17 banks in India and is wanted in connection with several cases.
“Diageo is pursuing substantial repayment and compensation from Dr. Vijay Mallya and certain of his affiliate companies,” a Diageo spokesperson said in a statement, according to Mint. “They include seeking compensation from Dr. Mallya for breaches of the agreements announced in February 2016 that ended his association with United Spirits.”
Mallya told The Wall Street Journal he would “file a robust defence”.
Diageo’s acquisition of United Spirits is mired in several legal proceedings now, as well as investigations into Mallya and his deal. Mallya is being investigated for money laundering among other things. According to Diageo’s deal with Mallya, he would be paid $40 million for resigning from United Spirits and another $35 million (Rs 227 crore) over five years, The Wall Street Journal reported. Their deal included an honorary title for Mallya and a noncompete arrangement.
King of good times?
Mallya was arrested twice this year – in April and October – and released on bail soon after. The arrests were made on fresh charges against him in a money laundering case. India has been seeking his extradition from the UK since the beleaguered businessman began his self-imposed exile in March 2016. He has claimed several times that the media has held him guilty without a trial and that the Indian government is pursuing a “heavily biased investigation”.