DRT asks Di­a­geo for deal de­tails

The tri­bunal has fixed June 2 as the date for com­mence­ment of fi­nal ar­gu­ments in the debt re­cov­ery case

The Financial Express - - FRONT PAGE - Ma­hesh Kulka­rni

Ben­galuru, April 29: The Debt Re­cov­ery Tri­bunal (DRT), Ben­galuru, on Fri­day di­rected Bri­tish liquor gi­ant Di­a­geo Plc to sub­mit a copy of the agree­ment it signed with em­bat­tled ty­coon Vi­jay Mallya on or be­fore May 12. The DRT also fixed June 2 as the date for com­mence­ment of fi­nal ar­gu­ments in the debt re­cov­ery case filed by the SBI-led con­sor­tium of banks.

When the Tri­bunal com­menced hear­ing on Fri­day, the Pre­sid­ing Of­fi­cer Jus­tice C R Be­nakana­halli ques­tioned the Di­a­geo coun­sel as to why they have not fur­nished the copy of the agree­ment. In its March 7 or­der, the DRT had or­dered for dis­clos­ing de­tails of the agree­ment be­tween Mallya and Di­a­geo.

“We have al­ready fur­nished part of the agree­ment in our ob­jec­tions filed be­fore the DRT,” the coun­sel for Di­a­geo said. A coun­sel for State Bank of In­dia, how­ever, pleaded for sub­mis­sion of the agree­ment copy by the com­pany.

The Pre­sid­ing Of­fi­cer is­sued di­rec­tions for sub­mis­sion of the agree­ment copy on or be­fore May 12 and ev­i­dences on June 2 be­fore it be­gins fi­nal hear­ing on the case. The DRT also di­rected the coun­sel for United Spir­its to sub­mit a copy of their agree­ment with Vi­jay Mallya separately.

The coun­sel for SBI re­quested for daily hear­ing in the case in view of the Supreme Court's di­rec­tions for speedy dis­posal of the case. While de­clin­ing to hear the case on a daily ba­sis, the judge said: “The Supreme Court wants the case to be com­pleted at the ear­li­est. We will take up the fi­nal ar­gu­ments in the case from June 2 on pri­or­ity.”

The DRT in its March 7 or­der had also di­rected for at­tach­ment of the $75 mil­lion exit pay­out by Di­a­geo to Mallya. The coun­sel for SBI brought to the no­tice of the DRT that the com­pany had not yet at­tached the exit pack­age with DRT. “Where is the money? Why have you not at­tached the money yet?” the DRT asked the coun­sel for Di­a­geo.

Di­a­geo's coun­sel stated that the com­pany has al­ready paid $40 mil­lion to Mallya as part of the agree­ment im­me­di­ately af­ter sign­ing the agree­ment and there is no ques­tion of pay­ing the re­main­ing $35 mil­lion im­me­di­ately. “The re­main­ing part of the money will be paid to Mallya only af­ter ful­fill­ing cer­tain condi- tions, if at all it has to be paid to him. As of to­day, noth­ing is due from the com­pany to Mallya,” the coun­sel for Di­a­geo told the Tri­bunal. On Fe­bru­ary 25, Di­a­geo signed a set­tle­ment agree­ment with Vi­jay Mallya and agreed to pay him $75 mil­lion (around Rs515 crore) in re­turn for his res­ig­na­tion as non-ex­ec­u­tive chair­man of United Spir­its, the com­pany built by Mallya.

Di­a­geo has ac­quired ma­jor­ity con­trol in USL. Mallya had also agreed for a non-com­pete clause for five years across the world ex­cept the UK mar­ket.

Mallya owes around R9,000 crore in­clud­ing in­ter­est to a con­sor­tium of banks led by State Bank of In­dia.

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