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Debt dispute between Diageo and former United Spirits boss continues

Published:  13 May, 2016

British alcohol giant Diageo Plc has submitted details of its agreement with USL's former boss Vijay Mallya to a debt tribunal.

Yesterday (May 12), Diageo Plc submitted a copy of its agreement with UB Group chairman Vijay Mallya to the Debt Recovery Tribunal (DRT) in Bengaluru, India.

This follows a $75million exit deal between the UK drinks giant and Mallya's United Spirits - a subsidiary of Diageo.

On April 29, the DRT had pulled up Diageo for the delay in producing the details of its agreement with Mallya and directed it to submit it by May 12.

Previously, Diageo signed a settlement agreement with Mallya and agreed to pay him $75 million in return for his resignation as non-executive chairman of United Spirits - the flagship company of the United Breweries (UB) Group.

Vijay MallyaVijay Mallya

Diageo flagship brands

Diageo has now acquired majority control in USL.

In 2012, Mallya ceded management control of USL to Diageo, although he retained a minority stake in the business.

In February 2015 Mallya was forced to resign as Chairman, in a multi-million dollar exit-deal.

Diageo paid Mallya $40 million on February 25 and agreed to pay the balance $35 million over the next five years.

One of the conditions of the deal is that Mallya does not compete with Diageo in the global beverages market - except in Britain - for the next five years.