After hearing the British company and a State- Bank of India (SBI)-led consortium of creditors to United Spirits, a bench comprising judges A K Patnaik and Ibrahim Kalifulla said various issues required deeper examination.
Diageo counsel Mukul Rohtagi said for the deal, the company had received approvals from the Reserve Bank of India, the Securities and Exchange Board of India and the Competition Commission of India. He added the bank consortium was aware of the deal completed in July and, at Rs 1,440, the valuation of the shares was transparent. The transaction had been annulled on wrong legal presumptions, the counsel said.
The consortium of lenders argued there was gross undervaluation of the shares. Huge amounts had gone to foreign tax havens. “Now, they want immunity for these transactions,” the counsel said.
On December 20, a high court had declared a deal in which UB Holdings had sold 10 million shares in United Spirits to Diageo as null and void. The shares, amounting to 6.96 per cent stake in United Spirits, were ordered to be returned to UB Holdings within two weeks. The transaction was part of a larger deal through which Diageo acquired 25.02 per cent stake in United Spirits from UB Group Chairman Vijay Mallya and his various affiliate companies, at Rs 1,440 a share.