ED lens on Mallya’s $75m Diageo deal

NEW DELHI: The woes of controversial tycoon Vijay

Mallya

are mounting. His payout deal with Diageo Plc worth $75 million (around Rs 500 crore in today’s exchange rates) for stepping down as chairman of United Spirits earlier this year has come under the scanner of the Enforcement Directorate (ED).

ED, already probing Mallya for money laundering in Kingfisher Airlines’ Rs 900 crore loan from IDBI Bank, has asked the British liquor major to provide all details pertaining to the deal, top sources told TOI.

Sources said ED has written to Diageo seeking clarification on terms of agreement of the deal, the basis on which the sum of Rs 500 crore was decided and mode and schedule of payment to Mallya among other details.

Vijay Mallya was paid $40 million (close to Rs 265 crore) immediately as part of the deal by Diageo while the remaining sum is to be paid over five years.

When contacted, Diageo’s London media enquiry office replied to TOI via email saying, “We will of course co-operate with any government agency that contacts us for information.”

ED is understood to have information that Mallya has been paid outside the country as part of the first instalment of his payout deal by Diageo but the Indian government was not kept in the loop with regard to the payment.

The deal signed on February 25 this year gives Mallya US $75 million over a period of five years, in return for stepping down as non-executive chairman of the company (United Spirits).

A week after the deal, on March 2, Mallya fled to London without informing probe agencies CBI and ED or market regulator Sebi while the consortium of 17 banks who the businessman owes Rs 9,000 crore were also in the dark. Government agencies are probing allegations of misappropriation of the loan.

The Debt Recovery Tribunal (DRT) in Bengaluru has barred Mallya from withdrawing the $75-million exit payment till the disposal of Kingfisher Airlines’ case.

Mallya, who runs the risk of being deported from United Kingdom after revocation of his passport last week, is being investigated by multiple agencies and has been declared a “wilful defaulter” by Indian banks.

Sources in ED say while Mallya has been fighting Indian banks and agencies legally in Supreme Court but neither he or his lawyers have even once replied to any ED summons for clarification. ED sent summons to his bungalow in Tewin village, on the outskirts of London.

The agency will also soon apply for an Interpol red corner notice against Mallya while his movable and immovable assets in India and abroad are being assessed by investigators apart from probing some 40 companies where he has direct or indirect ownership. This was first reported by TOI.