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In a surprise move, UB Holdings has made an open market purchase of shares, even as the Karnataka High Court had barred the company from entering into any transaction until the winding up cases filed against the company are settled by various courts.
UB Holdings has said in a filing with the National Stock Exchange it bought 193,000 shares of United Breweries (UB) on the open market on January 28 and 29, taking the former’s stake in the beermaking arm of the UB group to 11.46 per cent from 11.42 per cent.
The shares were bought for about Rs 16 crore. This is despite the Karnataka High Court barring UB Holdings from any transaction till winding-up cases filed against it are settled. The UB group spokesperson denied comment saying the issue was still in the courts. Shares of United Breweries were down a per cent to Rs 825.25 apiece on Monday on the BSE exchange.
Coming barely one month after a division bench of the Karnataka High Court asserted that UB Holdings was barred from carrying out any transaction before the winding up petitions against the company are settled, the share purchase may invite legal complications, according to experts familiar with the proceedings. The High Court had even struck down UB Holdings sale of a 6.96 per cent stake in United Spirits Ltd to global major Diageo Plc, despite the transaction being approved by a lower court, leading to all parties involved appealing against the decision in the Supreme Court.
UB Holdings has also previously been warned of being wound up on grounds of 'contempt of court' if any objectionable transcation is carried out by the company without the permission of the Court.
Checks have been placed on the company as five winding-up petitions have been filed by creditors trying to get back dues of Rs 600 crore from UB Holdings. Creditors to Kingfisher Airlines, with dues of about Rs 6,000 crore, have also filed lawsuits invoking the corporate guarantee given by UB Holdings, the promoter of the now defunct airline. Kingfisher Airlines has also said it will appeal against the winding-up petition admitted against the company.
The source of the funds obtained to make the purchase is also being questioned by legal experts as the UB Holdings cannot use any of its cash without the prior permission of the Court.
