India's Supreme Court has admitted a set of appeals challenging Karnataka High Court’s decision to annul 6.9% stake sale in the United Spirits by United Breweries (Holdings) Ltd (UBHL) to UK-based drinks company Diageo.
United Breweries (Holdings) Ltd (UBHL), which was the guarantor is the holding company of Vijay Mallya's UB Group.
The lenders of United Breweries Holding Ltd (UBHL) had approached Karnataka High Court, which not only cancelled the sale on 20 December 2013 but also ordered Diageo to return the acquired shares to UBHL within two weeks because creditors had a claim over the UBHL's assets, LiveMint reported.
In February 2014, the Supreme court had ordered the firms to maintain the status quo.
The Supreme Court now stated that the matter needs to be taken up in detail hearing in April.
Earlier this year, United Spirits had asked its chairman Vijay Mallya to quit as regulatory agencies have begun probing into suspected irregularities in the company. Mallya-led UB Group had sold controlling stake in United Spirits (USL) to Diageo. A probe found that Mallya had diverted funds in the past to various UB Group firms including Kingfisher, which is currently a defunct aviation firm.
However, Mallya had rejected this USL demand and the charges as well. USL had threatened that its board would go to shareholders if Mallya did not step down, a First Post report had said.
In September, Diageo had said that it might lose more than 10 million shares of United Spirits Ltd (USL) worth over Rs 32.35bn ($487m) at current market price, in case of an unfavorable ruling on the several petitions filed against United Breweries Holdings Ltd (UBHL), from which it had acquired these shares.
As part of a $3bn deal in 2012, Diageo had bought these shares amounting to 6.98% stake in USL from UBHL. This enabled Diageo to gain a majority stake in the Vijay Mallya-owned UBHL.
However, the sale of shares was challenged in the court by the lenders of UBHL as the latter defaulted on the loans. Diageo had said that it would continue to have control over USL even if it would lose the 10 million shares.
