Diageo To Pay Vijay Mallya Over 515 Crore As Separation Fee

LONDON: Flamboyant businessman Vijay Mallya will get USD 75 million (Rs 515 crore) from Diageo as part of an “agreement” for his exit from United Spirits, a company founded by his family and now run by the global liquor giant.

Besides, Diageo has agreed that Mallya will have no “personal liability” to the UK-based company in relation to the findings of the alleged financial irregularities at the company that had triggered an acrimonious fight between them. These allegations, which surfaced after an internal inquiry, related to the period before Diageo acquired controlling stake in United Spirits Ltd (USL) from the Mallya family.

Under the agreement, Mallya will resign as Chairman and non-executive director of USL, as also from the boards of other USL group companies.

However, his son Siddharth Mallya would remain on the board of the USL group company which holds the Royal Challengers Bangalore IPL franchise and Diageo can not “seek to remove him from that board for a period of two years”. Father will have honorary title of the team’s Chief Mentor.

Mahendra Kumar Sharma, an independent director, will be the new chairman of United Spirits.

Giving details of the agreement reached with Mallya, Diageo said it has “agreed to pay USD 75 million to Mallya in consideration for his resignation and the termination of his appointment and governance rights and his relinquishing of the rights and benefits attached to his position as Chairman and non-executive director”, among other factors.

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