Sebi questions United Spirits on Diageo talks

The regulator has also sought a list of people who were privy to any unpublished and price-sensitive information

The Securities and Exchange Board of India (Sebi) had written to Vijay Mallya’s United Spirits “with a set of queries”, after the latter recently announced it is in talks to sell stake to Diageo Plc, a United Spirits spokesman said on Thursday, declining to specify the nature of the inquiry.

The Sebi queries come after shares in United Spirits surged 23 per cent in the four days leading up to the September 25 announcement, jumping an additional 10 per cent the day the spirits maker disclosed the talks.

Media reports on Thursday said Sebi was investigating stock price movements at the UB Group companies to check if there was any breach of insider trading norms. The regulator has asked the Group for details on the stake sale talks and also sought a list of people who were privy to any unpublished and price-sensitive information.

Shares of United Spirits on Thursday closed 0.2 per cent higher at Rs 1,263.9, while United Breweries Holdings gained 2.8 per cent to Rs 136.80.

United Spirits shares have been volatile through the year, due to widespread speculation about the company’s on-again, off-again courtship with Diageo. The volatility has come as Mallya has scrambled to raise funds for his ailing Kingfisher Airlines.

“We look at a lot of companies based on market movement and seek management’s comments but there is no formal probe yet (on UB),” a source at Sebi told Reuters.

“We have provided the information,” said Prakash Mirpuri, a spokesman with the UB Group, referring to the requests from Sebi. He declined to say if the investigations were linked to United Spirits’ share price movements.

“The movements in share prices of our group companies have been largely influenced by the wide speculation by the media, with no comments from us,” he said.