Tribunal halts Diageo's $75 million payment to Vijay Mallya

In a setback to businessman Vijay Mallya, the Bengaluru Bench of the Debt Recovery Tribunal on Monday temporarily restrained U.K.-based Diageo Plc from paying $75 million to him as per the reported agreement signed with him.

C.R. Benakanahalli, the presiding officer of the Bench, in his brief order also directed Mr. Mallya not to receive, temporarily, the money as per the agreement while stating that the sum would stand attached till further orders on the proceedings initiated by the banks to recover money borrowed by the Mallya-owned Kingfisher Airlines Limited.

According to the banks, the total outstanding is now nearly Rs. 10,000 crore.

The tribunal also directed Diageo and Mr. Mallya to provide particulars of their agreement to the banks led by the State Bank of India, which have sought a garnishee order claiming first right over the $75 million that Mr. Mallya is to get from Diageo.

It was reported that Diageo had offered to pay $75 million (approximately Rs. 515 crore) to Mr. Mallya in a five-year period for stepping down from the post of Chairperson of United Spirits Ltd, which Diageo had acquired, and agreeing not to compete in business with it for a certain period.

Though banks’ counsel sought early hearing of their other three pleas, including one for arrest of Mr. Mallya, the DRT adjourned proceedings to March 28.

Counsel for Mr. Mallya and KFL said there was no hurry to hear other applications as similar pleas were made before the Karnataka High Court by the banks.

The banks on Friday had also moved the High Court with the same pleas citing delay in hearing their four applications by the DRT.

While issuing notices to Diageo Plc, Mr. Mallya and others on the petition filed by the banks, the High Court had allowed the DRT to go ahead with the hea-ring of the applications independently.