Sebi, other regulators to look into alleged lapses

With liquor giant United Spirits asking its own chairman, Vijay Mallya, to quit, the Securities and Exchange Board of India (Sebi) and other regulatory agencies have started looking into suspected irregularities at the company, including about the alleged fund diversion and disclosure-related lapses.

United Spirits Ltd (USL), in which Mallya-led UB Group has sold controlling stake to UK-based Diageo Plc, asked Mallya to step down as chairman and director after an inquiry revealed fund diversion in the past to various UB Group firms including the now-defunct aviation venture Kingfisher. Top officials said Sebi will look into all possible violations at USL, as also at other UB Group entities some of which happen to be separately listed companies and others form part of the promoter groups. The role of some individuals, including Mallya's, will also be looked into. The alleged lapses, including about fund diversion, also amount to violation of the Companies Act and the issue could also be separately probed by the Corporate Affairs Ministry, while accounting watchdog Institute of Chartered Accountant of India might look into the auditors' role to ascertain whether there were any lapses on their part. Some of the UB Group entities are already under the regulatory glare for various violations.