Repaid 625 cr to IDBI but securities not released: USL

United Spirits Limited (USL), the world's second-largest spirits company by volume, informed the high court on Monday that the IDBI Bank hasn't released its securities despite its loan having been repaid.

The USL has moved the court over the non-release of its securities by the bank.

Appearing for the USL, senior counsel P Chidambaram stated that the company had paid back Rs 625 crore to the bank. The bank is, however, holding back its securities on the grounds that the loans taken by Kingfisher Airlines remain unpaid.

The counsel for the IDBI Bank countered this, stating that it had given a loan to Kingfisher Airlines on the grounds that Vijay Mallya was the chairman of the United Breweries Holdings Limited (UBHL) group, of which the USL is a part. He asserted that the UBHL had given a corporate guarantee to the loan transactions of the now-defunct airlines.

Chidambaram insisted that the UBHL and the USL are separate entities and that Mallya has only a 1% stake in the latter. The IDBI counsel rebutted this argument and maintained that the USL was one of the obligors when the UBHL became a corporate guarantor to Kingfisher Airlines. The USL cannot be disassociated from the UBHL and that the banks had sanctioned the loan on its guarantee.

The IDBI counsel sought time to produce some documents. The court and put off the next hearing to March 21.