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UPDATE: Tribunal halts $75M payment to Vijay Mallya



Kingfisher chairman Vijay Mallya

Kingfisher chairman Vijay Mallya

(Diya TV) — The Bengaluru Bench of the Debt Recovery Tribunal ordered a stop to a $75 million severance payment Vijay Mallya was set to receive for resigning his post with United Spirits, India’s leading liquor provider — the original story was brought to you by Diya TV, and can be viewed here.

The Enforcement Directorate has filed a case against Mallya, alleging money laundering. The restrictions, which fall under India’s Prevention of Money Laundering Act (PMLA), come on the heels of the CBI registering a suo motu FIR against Kingfisher Airlines, a company which Mallya founded, in July 2015. According to records, the company owes at minimum Rs 7,000 crore to 17 banks. The State Bank of India and Punjab National bank have already labeled Mallya, and his defunct company, as “willful defaulters.”

Mallya’s $75 million payment was scheduled to be distributed through Diageo Plc. conglomerate, which owns and operates United Spirits. In February, Mallya announced he would be relinquishing his post as the company’s chairman after being offered the aforementioned parachute to step aside. The terms of the resignation would additionally absolve Mallya of any liability over scrutinized fiscal issues at the company founded by his family.

Sahara Force India, a Formula 1 racing team created by a consortium of businessmen, led by Mallya

Sahara Force India, a Formula 1 racing team created by a consortium of businessmen, led by Mallya

Almost immediately, the Securities and Exchange Board of India began looking into possible violations in corporate governance because of the severance. In Bengalaru, Debts Recovery Tribunal judge C. R. Benakanahalli temporarily prevented Mallya from receiving the exit package while ruling on an interim application filed by a consortium of 15 banks led by the State Bank of India against Mallya in a debt recovery case from 2013.

Mallya will be issued no payments of any kind until the case is settled, according to the order from the tribunal.

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