Following a whistleblower s complaint, a Bengaluru-based company incorporated in March 2018 and run by Vijay Mallya s former executive assistant has come under the scanner of investigative agencies for its alleged association with the fugitive businessman.
The whistleblower, in the complaint to United Breweries Ltd, has alleged that the liquor firm s export agent Ultimate Branding Worldwide, run by V Shashikant, Mallya s former executive assistant is exporting Kingfisher Beer at a discounted price to a front company overseas, that, in turn, sells it at a premium to buyers in UAE, Malaysia and Singapore. The profit generated through this, according to the complaint, is allegedly being repatriated to Mallya through overlapping transactions to fund his daily maintenance and legal expense .
The Enforcement Directorate (ED), which is probing Mallya under the Prevention of Money Laundering Act (PMLA), searched the office of Ultimate Branding Worldwide on July 24, following the whistleblower s complaint.
The complaint said that Ultimate Branding, which has monopolistic rights for exporting and trading all brands of Kingfisher beer since March 2018 is exporting beer to Tammy International FZE in Sharjah, a company allegedly owned by Shashikant s son-in-law. It alleged that Ultimate Branding is getting commission from UBL for getting business and also getting significant margins in USD in trading of Kingfisher beer in international markets via front companies .
Before 2018, UBL s export business was handled by UB Global, a subsidiary of Mallya-controlled United Breweries Holdings Ltd.
Dutch beer maker Heineken is now the largest stakeholder of UBL with over 46% stake. While Mallya and a few of his firms own over 11% stake in the company, these shares were attached by the ED after Kingfisher Airlines defaulted on loan repayment of about over Rs 7,000 crore to Indian banks.
Mallya stepped down from the board of UBL in October 2017, following a Securities and Exchange Board of India (SEBI) order that made him ineligible to be director of any listed company.
I have never heard of Tammy International and have no connection with them, Mallya said in an email response.
We have been made aware about the incident with respect to Enforcement Directorate visiting the office of our export manager, M/s. United Branding Worldwide, though we are not aware of any further details nor are we privy to it. We are in the process of internally looking into the allegations levelled by the whistleblower. Such enquiry may take some time and we will be able to comment on the allegations once we have examined the matter thoroughly, said a spokesperson of UBL.
We acknowledge that the Enforcement Directorate searched the offices of Ultimate Branding Worldwide. We have extended full support to them and shall continue to do so. We deny the allegation that the two companies are associated with Mr Vijay Mallya nor do they have any transactions with him, said a spokesperson of Ultimate Branding.
The whistleblower s complaint has termed the agreement between UBL and Ultimate Branding Worldwide as a related party agreement owing to the alleged close ties between Mallya and Shashikant. It has also asked UBL to conduct a third party forensic audit and investigate Tammy International and its relationship with Mallya.
Mallya-promoted Kingfisher Airlines owes about Rs 10,000 crore, including interest, to a consortium of 17 public sectors banks including State Bank of India, IDBI Bank, Punjab National Bank, Bank of India, Bank of Baroda, United Bank of India, Central Bank, UCO Bank, Corporation Bank, Indian Overseas Bank, Federal Bank, Punjab and Sind Bank, and Axis Bank.
Both Mallya and the airlines have come under the scanner of the Central Bureau of Investigation (CBI), Serious Fraud Investigation Office (SFIO) and ED. So far, the ED has attached assets worth about Rs 12,500 crore of Mallya under the Prevention of Money Laundering Act (PMLA).
Mallya, who left India in March 2016, has been declared a fugitive economic offender by a court in Mumbai. India has also requested Mallya s extradition from UK, where he currently resides. Mallya has challenged the extradition order passed by a Westminster Court in UK. The UK high court will begin hearing the case in February 2020.