The Serious Fraud Investigation Office or SFIO is probing alleged mismanagement of over Rs 8,000 crore of funds since 2005, when liquor baron Vijay Mallya’s UB Group-controlled Kingfisher Airlines and United Spirits

United Spirits Falls on Inquiry Over Vijay Mallya’s Kingfisher Airlines
NDTV
16 September 2015
United Spirits shares traded down for a second consecutive session, falling as much as 1.6 per cent against 0.8 per cent gain in the broader markets on Wednesday. Traders attributed the selling in United Spirits – India’s biggest liquor company- to the ongoing investigation in former group firm Kingfisher Airlines over alleged diversion of funds.

The Serious Fraud Investigation Office or SFIO is probing alleged mismanagement of over Rs 8,000 crore of funds since 2005, when liquor baron Vijay Mallya‘s UB Group-controlled Kingfisher Airlines and United Spirits, according to media reports.Kingfisher Airlines, which owes $1.5 billion to lenders, has not flown since 2012; United Spirits was acquired by London-based Diageo in 2013, though Dr Mallya continues to be its chairman.

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.

“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 a statement to the Bombay Stock Exchange on Tuesday. The company is cooperating with the investigating authority, it added.

The board of United Spirits began a procedure in April to remove Dr Mallya from his position as chairman. Dr 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 Dr Mallya’s UB group declined to comment on the SFIO probe on Tuesday.

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