HC orders winding up of UB Holdings

HC orders winding up of UB Holdings

The high court on Tuesday ordered the winding up of United Breweries (Holdings) Ltd, dealing yet another blow to liquor baron Vijay Mallya.

The company faces liquidation for failing to pay its dues to international companies and a consortium of banks led by State Bank of India.

Justice Vineet Kothari pronounced the judgement by video conference from Dharwad.

He said, “UBHL deserves to be wound up for failure to discharge its duty to pay its creditors.”

Four weeks’ time

The judge ordered an official liquidator to take over the company’s assets and file a status report within four weeks from February 7. The court also sought details of litigation pending against UBHL in various courts and tribunals.

IAE International Aero Engines AG and a host of Indian banks were among those who had approached the high court in 2012 seeking winding up of UBHL.

UBHL’s deposit of Rs 1,280 crore, made in court under interim orders, will also be distributed, the judge said.

Surety for airline

The lenders had filed a case seeking their dues from the now defunct Kingfisher Airlines. UBHL had given corporate guarantees for loans to run Kingfisher, which has virtually caused the collapse of Mallya's liquor empire. Mallya owns 52.34% in UBHL.

Speaking to DH on the developments, S S Naganand, senior counsel representing the consortium of banks, said UBHL had little option but to pay up. “It might go in appeal to a divisional bench within 30 days,” he said.

A CBI court last month issued a non-bailable warrant against Mallya in the Rs 720-crore IDBI Bank loan default case. The agency has also sought his extradition from the UK.

Earlier, the Debt Recovery Tribunal in Bengaluru had ordered the SBI-led consortium to start the process to recover Rs 6,203 crore, at 11.5% annual interest, from Mallya and his company.

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