Karnataka News

Make a fair offer to banks: Karnataka High Court to Mallya firm

Creditors say nothing was seen on the ground apart from a tweet expressing readiness for a one-time settlement.

Published: 16th March 2017 05:07 AM  |   Last Updated: 16th March 2017 08:35 AM   |  A+A-

By Express News Service

BENGALURU: The High Court on Wednesday asked United Breweries (Holdings) Limited (UBHL), a commercially insolvent company, to come out with a fair offer of deposit to be paid to a consortium of banks and others creditors.

While asking UBHL’s counsel to get instructions from the company on the offer of deposit, the division bench of Chief Justice Subhro Kamal Mukherjee and Justice R B Budihal also suggested the banks and UBHL to hold talks to arrive at a fair settlement.

The bench adjourned the hearing of appeal filed by UBHL against a single bench order dated February 7, 2017, to March 22.

During the hearing, the counsel representing the consortium of banks led by State Bank of India, submitted that so far except Vijay Mallya’s tweet expressing readiness for a one-time settlement, there was nothing visible on the issue. 

Before this, UBHL’s counsel submitted that Rs 1,280 crore has been deposited with the High Court and they were ready to settle the matter.  UBHL has filed an appeal against the order of a single bench which had ordered the winding up of the firm, on account of its failure to discharge the guarantee obligations.

The petitioners, including of IAE International Aero Engines AG and the consortium of banks, had prayed the High Court seeking directions to wind up UBHL to recover the dues payable by company, which had given the corporate guarantee to the now defunct Kingfisher Airlines Limited (KFAL).

Initially, UBHL was the holding company of KFAL, but later, on diluting its shareholding in the airline, KFAL did not remain a subsidiary company. However, the existence and validity of corporate guarantees given by UBHL continued.

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