Force India owner Mallya under pressure to resign from USL board

Force India owner Vijay Mallya is facing calls to resign from the board of United Spirits Ltd after an internal enquiry said he had allegedly diverted funds to other companies.

United Spirits Ltd is an Indian liquor maker controlled by Diageo Plc of which Mallya is chairman and director.

Diageo, which recently bought a controlling stake in United Spirits, has asked Mallya to resign after it found "various improprieties and legal violations" after conducting a probe into loans given by United Spirits to other companies in the group, including Kingfisher Airlines, which sponsors the Force India Formula 1 team.

Kingfisher, established in 2003, was grounded in October 2012 after years of financial issues.

"The inquiry revealed that between 2010 and 2013, funds involved in many of these transactions were diverted from the company and/or its subsidiaries to certain UB Group companies, including in particular, Kingfisher Airlines," the United Spirits board said.

"In the event Mallya declines to step down, the board also resolved that it would recommend to the shareholders of the company, the removal of Mallya as a director and as the chairman of the board."

It added: "In light of the above, and without making any determination as to fault or culpability, the directors noted that they had lost confidence in Vijay Mallya continuing in his role as a director and as chairman and therefore, the Board called upon Mallya to resign forthwith as a director and as the Chairman of the Board and step down from his positions in the company's subsidiaries."

Mallya has refuted the claims and says he has no intention to step down.

"All I wish to say is that I intend to continue as Chairman of USL in the normal manner. This includes chairing monthly operating review meetings and board meetings," he said in a statement.

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About this article
Series Formula 1
Teams Force India
Article type Breaking news
Tags vijay mallya