In new trouble for liquor baron Vijay Mallya, India's Serious Fraud Investigation Office (SFIO) is probing alleged fund mismanagement exceeding Rs 8000 crore by Kingfisher Airlines, grounded since 2012, to other group firms and has sought details from United Spirits, according to agencies.
Mallya's flagship United Spirits Ltd (USL), now controlled by British liquor giant Diageo, confirmed in a BSE filing that the SFIO has sought information from the company about fund diversions by Kingfisher Airlines, PTI reported. USL said it is cooperating with the authorities.
The domestic liquor maker's filing came in response to clarification sought by the BSE about reports that SFIO was probing flow of funds between Kingfisher Airlines and some other group companies, including United Spirits, the report said.
The carrier had accumulated losses of Rs 16,023 crore, while its networth fell to a negative Rs 12,919 crore at end of March 2013. United Spirits had also come under the scanner of multiple regulators amid allegations of fund diversion from USL to some UB Group companies, between 2010-2013.
Earlier this year, a major boardroom battle erupted with USL's board demanding ouster of its chairman Mallya, whose UB Group had sold controlling stake in the company to Diageo. Shares of United Spirits closed 1.65 per cent lower at Rs 3,205.95 on the BSE.
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Sources told Moneycontrol.com that SFIO has sent notices to United Breweries, Kingfisher Airlines and United Spirits and is likely to summon Mallya, executives of United Breweries and United Spirits.
The SFIO is looking into irregularities from 2005, when Mallya's UB Group controlled both companies.
An auditor's inquiry into United Spirits' financial accounts, conducted after Diageo took control, showed that between 2010 and 2013, funds were allegedly diverted illegally from the company to some of Mallya's group firms, including Kingfisher, Reuters reported.
As a result, the board of United Spirits, under the new Diageo management, began a procedure in April to remove Mallya from his position as chairman.
"The SFIO noted that the company (United Spirits) had conducted an inquiry wherein possible fund diversions were identified, and requested some information from the company in relation to that," United Spirits said in the statement.
Mallya has denied the allegations and in April said in a statement to Reuters that he would not resign as chairman of United Spirits. A spokesman for Mallya's UB group declined to comment on the SFIO probe on Tuesday. (With inputs from PTI and Reuters)
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Mallya's flagship United Spirits Ltd (USL), now controlled by British liquor giant Diageo, confirmed in a BSE filing that the SFIO has sought information from the company about fund diversions by Kingfisher Airlines, PTI reported. USL said it is cooperating with the authorities.
The domestic liquor maker's filing came in response to clarification sought by the BSE about reports that SFIO was probing flow of funds between Kingfisher Airlines and some other group companies, including United Spirits, the report said.
The carrier had accumulated losses of Rs 16,023 crore, while its networth fell to a negative Rs 12,919 crore at end of March 2013. United Spirits had also come under the scanner of multiple regulators amid allegations of fund diversion from USL to some UB Group companies, between 2010-2013.
Earlier this year, a major boardroom battle erupted with USL's board demanding ouster of its chairman Mallya, whose UB Group had sold controlling stake in the company to Diageo. Shares of United Spirits closed 1.65 per cent lower at Rs 3,205.95 on the BSE.
United Spirits: Got a letter from India's SFIO pertaining to possible fund diversion in Kingfisher air probe & cooperating with authorities.
— ET NOW (@ETNOWlive) September 15, 2015Sources told Moneycontrol.com that SFIO has sent notices to United Breweries, Kingfisher Airlines and United Spirits and is likely to summon Mallya, executives of United Breweries and United Spirits.
The SFIO is looking into irregularities from 2005, when Mallya's UB Group controlled both companies.
An auditor's inquiry into United Spirits' financial accounts, conducted after Diageo took control, showed that between 2010 and 2013, funds were allegedly diverted illegally from the company to some of Mallya's group firms, including Kingfisher, Reuters reported.
As a result, the board of United Spirits, under the new Diageo management, began a procedure in April to remove Mallya from his position as chairman.
"The SFIO noted that the company (United Spirits) had conducted an inquiry wherein possible fund diversions were identified, and requested some information from the company in relation to that," United Spirits said in the statement.
Mallya has denied the allegations and in April said in a statement to Reuters that he would not resign as chairman of United Spirits. A spokesman for Mallya's UB group declined to comment on the SFIO probe on Tuesday. (With inputs from PTI and Reuters)
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