3 and 5 Year Bans On Vijaya Mallya

The Securities and Exchange Board of India (SEBI) has barred liquor baron Vijay Mallya from accessing the securities market for three years.

He is also prohibited from holding any key managerial position including that of director in a listed company for five years.

The ban applies from order dated Friday, 2 May.

The bans are placed for his involvement in fraud.

The Board has also barred former managing directors of United Spirits(USL) Ashok Capoor and former executive director PA Murali for a period of one year each. They have also been restrained from holding directorships or key managerial posts in any listed company.

The Illegal Fund Diversion
USL first gave trade receivables and advances to distributors and project related entities(PRE). These advances were disclosed as amounts towards working capital requirements, enhancement of capacities and lease deposits in USL books.

Then, Mallya and other key management people asked these fund receivers to transfer the money to United Breweries (UB) Group of companies. However the distributors and  PREs refused to return the advances stating that the company owed these amounts as part of dues or funds forwarded to parties at behest of Mallya.

 

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