Vijay Mallya diverted Rs 170 crore from United Spirits Ltd firm to IPL account: Report

www.mangaloretoday.com

New Delhi, June 1, 2015: In 2011 when Liquor baron Vijay Mallya had complete control over United Spirits Ltd (USL) almost Rs 170 crore were diverted from the company to the accounts of his Indian Premier League (IPL) team Royal Challengers Bangalore (RCB), according to a report published in DNA on May 29.

The transfer of funds was masqueraded as an allotment of his IPL team’s shares to United Spirits Ltd, of whom Mallya was the principal promoter at the time of the transaction, according to the report.

 

That was an astronomical self-valuation of an IPL team which was barely three years old as a brand. The allotment of fully paid up shares at such a premium meant that Rs 170 crore were diverted from USL’s account into RCB’s accounts that year.

The shares were allotted by RCB to USL on March 11, 2011. Nominal shares worth Rs 10 were allotted to USL for an astounding sum of Rs 3,62,240 per share.

In fact, in the 2011 auction, which took place in the first month of the year, RCB were the most aggressive buyer. They retained just one player in Virat Kohli and put the rest on sale.

However, eventually RCB emerged as the team that spent the most on buying new players. After spending almost $8.6 million (about Rs 55 crore), RCB ended with players like AB de Villiers and Saurabh Tiwary who were bought for more than $1 million each. And as per the newspaper report, a part of the money diverted from USL was also used to pick up players like Zaheer Khan, Daniel Vettori, Cheteshwar Pujara and Dirk Nannes (who was later replaced by Chris Gayle during the tournament).

Mallya still holds a minority stake in USL after selling it off to Diageo in 2013.