Karnataka HC annuls sale of United Spirits’ shares to Diageo

Karnataka HC annuls sale of United Spirits’ shares to Diageo

The Karnataka High Court (HC) on Friday annulled the sale of United Spirits Ltd's more than 19 lakh shares to global spirits giant Diageo, in response to a winding-up plea filed against United Spirits by the group's creditors.

UK-based Diageo, the world's largest spirits maker, had purchased the shares for more than 472 crore in November last year.

A division bench comprising Justice N Kumar and Justice Rathnakala declared the sale of the share null & void, and said the stake sale would be void until a conclusion is reached on creditors' winding-up pleas filed against Vijay Mallya-led group.

The bench also asked the British spirits giant to return the share to the Indian company.

In response to the ruling, Vijay Mallya said that his company would take all necessary steps to protect its own and Diageo's interests. UB Group spokesperson Prakash Mirpuri said that they would take a decision after studying the
150-page judgment. He added the option of appealing the high court's ruling was also open to them.

A spokesperson for Diageo said, "We do not believe that there are any grounds for declaring the sale of the 10,141,437 shares in United Spirits (6.9 per cent of USL) purchased by Diageo on 4 July 2013 from UBHL as void."

Creditors are seeking recovery of unpaid dues of around Rs 600 crore from Mallya's company.

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