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Creditors to UB Holdings on Thursday accused the company of entering into yet another transaction in the form of a borrowing, despite court orders restraining the company from this last year. The allegation prompted Karnataka High Court judge Ananda Byrareddy to warn UB Holdings the company would be wound up on account of 'contempt of court' if the allegations were found true at any point of the court proceedings.
In a fresh allegation on Thursday, BNP Paribas said it had received an affidavit from United Spirits, a UB Group company now controlled by Diageo, opposing the winding up of UB Holdings, staking claim to Rs 1,685 crore and naming itself an unsecured creditor whose debt would be at stake if the company was wound up.
BNP Paribas, which had extended a Rs 200-crore loan to UB Holdings, said UB Holdings dues to United Spirits stood at about Rs 650 crore at the end of 2012-13. It added the new claim of Rs 1,685-crore dues implied UB Holdings had borrowed additional funds without the permission of the court and without any explanation for the need or use of the funds.
Creditors have challenged the integrity of UB Holdings, alleging various such transactions were carried out by the company without the knowledge of creditors or courts. They alleged the Rs 1,440-a-share paid by Diageo for UB Holdings' stake in United Spirits wasn't the "actual" price paid for the shares, adding some funds had exchanged hands between Diageo and UB Group chief Vijay Mallya outside the country. Creditors also alleged Mallya had moved Rs 4,000 crore to a British Virgin Islands subsidiary without any justification.
BNP Paribas has requested the court to set up a special committee comprising lawyers and special auditors to look into the validity of these transactions.
The BNP Paribas counsel alleged UB Holdings had flouted its undertakings and orders of both the division bench of high court and the single judge of the company court, which had asked the company not to enter into any transaction without its prior permission.
The approval for the sale of 6.9 per cent stake in United Spirits to Diageo (ruled void by the high court) on December 20 was only after a special permission from the company court in March 2013.
Checks have been placed on the company following a slew of winding-up petitions filed by creditors trying to get back dues of Rs 600 crore from the company. Creditors to Kingfisher Airlines, with dues of about Rs 6,000 crore, have filed lawsuits invoking the corporate guarantee given by UB Holdings, the promoter of the now defunct airline.
