Diageo asks Vijay Mallya to return $40 mn paid for exit

LONDON/NEWDELHI: British liquor giant Diageo Plc. Thursday said it has asked beleaguered businessman Vijay Mallya to return $40 million paid to him as part of the $75 million (₹515 crore) sweetheart deal for his exit from United Spirits Ltd (USL).

Diageo has stopped payment of $7 million a year to Mallya as part of the deal and sought compensation for the losses incurred by it. The British firm had agreed to pay Mallya, who now lives in the UK after banks approached courts to recover money lent to his now defunct airline, $75 million over five years as global noncompete and non-interference fee post his exit from USL.

Citing violation of the agreement by Mallya, Diageo has also ruled out the future instalments to him, saying “it was not liable to pay such amount”.

“Diageo and other group companies have demanded from Mallya the repayment of $40 million which was paid by Diageo on 25 February 2016, and also sought compensation from him for various losses incurred by the relevant members of the Diageo group on account of the breaches committed by him,” Diageo said in its preliminary results for the year ended 30 June 2017.

Diageo has paid $40 million of the total $75 million,while the balance $35 million was to be paid in equal instalments of $ 7 million a year over five years. This was subject to and conditional on Mallya’s compliance, with certain terms of the agreement, it added.