Vijay Mallya
Vijay MallyaReuters

Despite being asked to quit as the chairman of United Spirits Limited (USL), Vijay Mallya is still defiant to the company's board, saying only shareholders have the ability to remove a director and he would continue as its chairman.

The board has asked Mallya to resign after findings of a PricewaterhouseCoopers (PwC) inquiry showed some irregularities although it did not directly point to any guilty doing by Mallya or key executives close to him.

"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," Mallya told NDTV Profit.

Mallya said that the UK-based Diageo, which has a controlling stake of 54% in USL, is bound to support him as USL chairman and director under the contractual terms.

"If media want to have a field day and sensational headlines I want to say that I will continue as normal in my position as Chairman of USL," Mallya tweeted.

Mallya seems to have appointed Amit Desai, ML Bhakta and Harish Salve to fight the case, The Times of India reported.

"This entire episode is looking strange as both parties went into a deal with their eyes open, that too in a listed company," Sanjay Jain, director at Taj Capital, a New Delhi-based investment advisory firm, said.

Industry watchers see growing chances of Mallya considering a negotiated exit from the company.

"Mallya's resistance is futile and he should bow out gracefully. Diageo as a controlling shareholder can oust him through an ordinary resolution after calling for an emergency shareholder meeting. It's fait accompli in our view," said Shriram Subramanian, MD, InGovern Research Services, a proxy advisory firm assisting institutional investors on corporate governance matters.