United Breweries Ltd (UBL) said on Thursday that Vijay Mallya has ceased to be a director of the company following market regulator Sebi's order against him.
On January 25 this year, Sebi had restrained Mallya from holding positions as director or key managerial personnel of any listed company that has not been vacated till date, UBL said in a regulatory filing.
"The board at its meeting held today has authorised filing of requisite forms/intimations with the Registrar of Companies and other authorities notifying Dr Vijay Mallya's cessation from holding position of director in the company pursuant to the said order," the company said in its filing.
In January, the Securities and Exchange Board of India (SEBI) had barred Vijay Mallya and six former senior officials of United Spirits Ltd (USL) from buying, selling or dealing in securities either directly or indirectly for allegedly indulging in fraudulent activities.
SEBI had also restrained Mallya and Ashok Capoor, former managing director of United Spirits from holding position as directors or key managerial persons of any listed company. Financial daily Economic Times had reported in its edition dated January 25 that Dutch beer maker Heineken, which has a joint venture with United Breweries has been attempting to remove Mallya as chairman from board of the company.
The regulator directed United Spirits to provide information on steps taken to recover Rs 1,880.8 crore from Mallya and the companies to which funds were wrongly diverted. United Spirits was told to inform the regulator of action taken within 21 days.
"Mallya, the then chairman and non-executive director of USL, exerted pressure and influence over USL employees to arrange funds for Kingfisher Airlines," S Raman, whole-time member of Sebi, had stated in his order.
"It is, therefore, prima facie clear that Mallya, Mr Ashok Capoor along with the other KMPs (key managerial persons) were active in facilitating and/or had knowledge of the diversion of funds from USL to the companies of the UB Group," said Raman. "By diverting substantial funds from USL to companies of the UB Group, Mallya and other KMPs have engaged in an act or practice which prima facie operated as a fraud or deceit on the public shareholder/investors of USL".
The regulator alleged that funds were diverted mainly through trade receivable from distributors, advances to tie-up manufacturing units (TMU) and advances to project-related entities.
The market regulator's order was issued close on the heels of CBI naming Mallya, Kingfisher Airlines and eight others in a chargesheet related to loan default case.