UB Holdings fighting case against lenders on guarantees for Kingfisher Airlines

The guarantees are worth Rs 8,707 cr

United Breweries (Holdings), or UBHL, has challenged in the Bombay High Court the validity of Rs 8,707 crore worth of guarantees extended by it to lenders of Kingfisher Airlines, UBHL's chairman Vijay Mallya said here on Monday.

"They were not provided for because, well before guarantees were invoked, the company had filed a suit in the Bombay High Court, challenging the very validity of the guarantee," Mallya told reporters at the annual general meeting (AGM) of UBHL. "The suit has been admitted in the court."

In its report for UB Holdings for 2014-15, auditors S Vishnumurthy of Vishnu Ram & Co had warned the liabilities of UB Holdings would rise by Rs 7,730 crore because it has not accounted for several disputed liabilities of the company in its annual accounts.

Mallya said all investments made by the company were reviewed by the board using a set procedure.

Facing a bitter boardroom battle with Diageo, which owns majority stake in United Spirits, Mallya said he would continue to chair the AGM of USL.

In April, USL had asked Mallya to step down after an internal inquiry found funds were diverted from the liquor company to other UB group firms, including the now-defunct Kingfisher Airlines.

At the AGM, an irate shareholder objected to the resolution seeking reappointment of Vijay Mallya's son Siddarth Mallya as a director, questioning his contribution to the company.

Siddarth Mallya has attended only two of the five board meetings of UBHL. The shareholder cited above said: "We don't want him to be there as the as director for namesake."

"I am fit and fine. This year I will be 60 and I have told all my friends I will be celebrating my 20th birthday for the third time this year," Mallya told the shareholder, implying that he would continue to hold charge and skirting the son's contribution.

Mallya said UB Holdings would appoint a managing director and a chief financial officer in a month's time.