‘King of bling’ faces tussle with Diageo boss Menezes

TWO of the biggest Indian figures in global business are set to lock horns in a dispute over United Spirits (USL), the drinks firm in which Diageo has taken a £1.8bn controlling stake.

India’s ‘king of bling’ Vijay Mallya, who is chairman of publicly-quoted United Spirits, is refusing to resign after his board conducted an investigation indicating ‘various improprieties and legal violations’ connected to loans made to his holding company.

Mallya, the larger-than-life entrepreneur behind Kingfisher beer and the airline of the same name, who likes to be considered as India’s answer to Sir Richard Branson, said the probe relied on a report based on ‘half truths and twisted facts’ and he was going nowhere.

The future of Mallya, pictured, will be put to shareholders, placing his position as chairman directly in the hands of Diageo’s Ivan Menezes, the Indian-born chief executive whose firm controls 55pc of United Spirits.

Menezes, who has led the firm behind Smirnoff and Guinness for two years, is seeking legal advice.

When Diageo took the stake in United Spirits it signed an agreement that it would back Mallya as chairman. It is only allowed to renege on this deal subject to specific undisclosed conditions.

A Diageo (down 4p at 1866.5p) spokesman said: ‘The board of USL stated that they had lost confidence in Dr Vijay Mallya continuing in his role as a director and as chairman.

‘Dr Mallya has indicated he will not tender his resignation. Diageo has certain contractual obligations to support Dr Mallya.

‘Diageo notes the recommendation of the USL board and will now consider its position under its agreements with Dr Mallya in light of the inquiry report and materials provided to it,’ the firm’s spokesman said.

Mallya denies any wrongdoing, saying: ‘The inferences and allegations are unjustified and false. I intend to continue as chairman of USL in the normal manner.’