SFIO probes USL accounts

The Serious Fraud Investigation Office (SFIO) has begun investigation into possible fund diversions by Kingfisher Airlines, defunct airline of Vijay Mallya,  to firms in which he once held majority stakes such as United Breweries and United Spirits.

Kingfisher Airlines, started as a birthday gift for Mallya’s son, eventually shut operations in 2012 with accumulated losses of Rs 16,023 crore. The airline dragged down Mallya’s fortunes, forcing him to cede majority stake in his liquor and beer firms to global competitors. Now, British liquor giant Diageo controls majority in United Spirits, while Dutch beer brand Heineken controls United Breweries.

United Spirits confirmed to the BSE on Tuesday that it had received a letter from SFIO to provide information on internal investigations on “possible fund diversions” that were identified.

“The company is cooperating with the authorities in providing the required information,” the company said in a reply to a question by the BSE on possible investigations. Vijay Mallya was not reachable for comment.

In July, United Spirits said it had made provisions of about Rs 2,000 crore on loans to subsidiaries, related party transactions and losses due to shift in focus from core business.

In July, United Spirits had said  the ministry of corporate affairs and the income tax department had launched independent investigations and had sought the books of accounts of the company after an internal inquiry threw up illegal fund diversions from United Spirits to Kingfisher Airlines and other group firms

Diageo had led a board room battle to oust Mallya as the chairman of the company but did not succeed. Shares of United Spirits on Tuesday fell 1.65 per cent to Rs 3,205.95 on the BSE.