Out-on-bail beer tycoon VJ Mallya has stake in UB seized by investigators

India’s beer and spirits tycoon VJ Mallya may enjoy the spring in London, but back home the Enforcement Directorate (ED), India’s investigating agency for economic crimes, has taken possession of his stake in United Breweries (UB) and also stakes in other listed companies, media said on 22 May 2017.

According to reports, Mr Mallya owns around eight percent directly of UB, India’s largest brewer, and another 22 percent through privately held firms. Mr Mallya also directly owns around seven percent of UB Holdings, and also shares in United Spirits.

In the case of UB, nearly the entire direct holding and a little over a quarter of the indirectly held stake are pledged with banks.

Rumour has it that Heineken had recently approached the banks with a proposal to buy out all of Mr Mallya’s shares in UB which are pledged with them. Heineken owns a little over 43 percent in UB, which makes the Kingfisher brand of beer.

But, as the ED has now taken possession of Mr Mallya’s stake in UB, Heineken cannot buy it, pundits pointed out.

While the ED has possession of the shares, it cannot sell them unless it gets a confiscation order from the court, which it is hopeful of getting at the earliest opportunity.

Meanwhile the ED is preparing for a hearing in London on 13 June 2017 to have Mr Mallya extradited from the UK.

Mr Mallya has been living in self-imposed exile in Britain since March last year. He was arrested by Scotland Yard in April 2017 but was released on bail to the amount of GBP 650,000 a few hours later, it was reported.