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The Supreme Court has deferred an appeal against the Diageo purchase of shares in United Spirits Ltd to Monday, January 20. A special leave petition had been filed against the Karnataka High Court order on December 20 ruling the sale of 10 million shares of United Spirits by UB Holdings Ltd to Diageo void, as the transaction was not a "bona fide" one.
Vijay Mallya’s UB Holdings Ltd and London-based Diageo have both moved the Supreme Court against the order passed in favour of creditors to Kingfisher Airlines and UB Holdings claiming the sale was made without their consent and at a price much below what could've been procured.
These creditors had appealed against the order from a lower court in March 2013 allowing UB Holdings to part with 6.96% of its 14.16% stake in United Spirits to Diageo, despite 5 winding up petitions against UB Holdings at the time. Diageo has however dismissed the claims saying the transaction price of Rs 1440 a share was fair and the transaction was bona fide and genuine.
Diageo had initially planned to gain control over 53.4% of United Spirits to cement its position in India, but then ended up with only a 25.02% stake in July 2013, primarily from UB Holdings, Kingfisher Finvest and a preferential allotment. Diageo currently has a 26.37% stake in United Spirits, but that level will drop to 19.41% if the Supreme Court finally upholds the state High Court's verdict.
