UB Holdings asks Court for more time to provide securities

Company needs to furnish securities to settle tax liability case, pay Kingfisher employees

UB Holdings today petitioned the Karnataka High Court for more time to furnish securities mandated by the court against its plea to settle tax dues and disburse a month’s salary to employees of Kingfisher Airlines. As a result, the division bench has adjourned the hearing.  

Justice Dilip B Bhosale and B Manohar had agreed on Monday, October 7, to grant the company permission to pay Rs 47 crore to settle a tax liability and Rs 13.07 crore to the employees, provided UB Holdings could furnish securities for the funds amounting to a total of about Rs 60 crore, should another of the several cases filed against UB Holdings require the same.

UB Holdings Ltd had sought the Division Bench’s permission to use funds from a Rs 380-crore bank deposit account created from the proceeds of their stake sale in United Spirits Ltd to Diageo Plc. Under a previous ruling, the Court had barred usage of the funds without the approval.

While UB Holdings has made it clear that it is only one of the promoters of Kingfisher Airlines and that it has no legal liability to pay salaries to employees of the airline, the board of the defunct airline has requested UB Holdings to continue some funding on “humanitarian grounds” in order to “keep the lights on” at Kingfisher Airlines.