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Diageo holds USD 35 million payment to Vijay Mallya

Press Trust of India  |  New Delhi 

British giant Diageo has decided to withhold remaining USD 35 million due to Vijay Mallya as part of the USD 75 million (Rs 515 crore) sweetheart deal for his exit from Ltd, a source familiar with the development said.

Also, Diageo is looking to recover dues from the businessman, who is wanted in with regard to cases of loan default and diversion of funds.

Diageo had last year paid USD 40 million to Mallya as part of its payout package.

"They have decided not to pay the remaining USD 35 million as there was violation of terms of agreement by the other side," a source said on the condition of anonymity.

The British giant was supposed to pay the remainaing USD 35 million in two equal amounts.

The source, however, refused to share the conditions of their "terms of agreement", which were violated by Vijay Mallya.

In July 2016, disclosed Rs 1,225.3 crore worth fund diversion and improper transactions with entities associated with Mallya including Kingfisher Airlines and his Formula One team.

Making it clear that the settlement reached earlier with Mallya would cover the latest disclosures, USL -- now controlled by Diageo -- had said the former Chairman would be liable for claims over the amount.

Several banks have declared him 'wilful defaulter' for failing to pay back loans amounting to thousands of crores.

A consortium of 17 banks lead by SBI has been trying to recover dues of over Rs 9,000 crore from now defunct Kingfisher Airlines, which was promoted by Mallya.

Mallya had come under intense scrutiny after the sweetheart deal he inked with Diageo to exit from the board of the company founded by his family.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, July 17 2017. 21:23 IST