Liquor firm United Breweries Ltd. has withheld dividends payable to its beleaguered Chairman Vijay Mallya for the financial year 2015-16 following the directions of Debt Recovery Tribunal (DRT).
The board of the company in its meeting held on May 13, 2016 had recommended 115 per cent dividend, which is Rs 1.15 per equity share of Re. 1 for the financial year ended March 31, 2016.
UBL said it has been directed by Debt Recovery Tribunal Karnataka to hold the dividends arising out of “shares in the company held by a director (including his joint holdings) and United Breweries (Holdings) Ltd, without its prior permission” without naming the director.
“Accordingly, the company would withhold payments of proposed dividend on aforesaid shares, which is subject to approval by the shareholders in the ensuing annual general meeting,” it said in a regulatory filing.
On the basis of his own holding of 2,13,53,620 shares in UBL as on March 2016, the dividend payable to Mr. Mallya is Rs. 2.4 crore for the last fiscal.
UBL’s nine promotor entities, including Mr. Mallya, have 8,11,88,930 shares in the company and the total dividend payable would be Rs. 9.33 crore.
When contacted, UBL spokesperson declined to comment on details.
UBL also informed that it has received another order from the Income Tax Department requesting it to create a charge in favour of the Central government for “any amount due or likely to be due” as tax demand of Rs. 679.80 crore relating to defunct Kingfisher Airlines.
“The company has accordingly withheld payment of Rs. 161 lakh relating to director commission payable to the aforesaid director,” it said.
On March 7, the Debt Recovery Tribunal had barred Mr. Mallya from accessing $75 million (Rs. 515 crore) exit payment from Diageo till the loan default case with SBI is settled while the Enforcement Directorate registered a money laundering case against him in another default case.
Mr. Mallya is currently in the U.K., amid tightening of the noose by various enforcement agencies and lenders who are trying to recover over Rs. 9,000 crore dues from Kingfisher and its guarantors. His passport has been revoked and non-bailable warrant has been issued against him.