In a blow to Vijay Mallya, the Karnataka High Court on Tuesday admitted a winding-up petition filed by BNP Paribas against United Breweries Holdings (UBHL), laying claim to an amount of $26.63 million under corporate guarantee, which the company had not paid.
BNP Paribas had financed Kingfisher Airlines? acquisition of three ATR 72-212A aircraft in 2006. UBHL is the holding company of the UB Group, to which Kingfisher belongs. The admission of the petition will lead to further hearing on whether UBHL should be wound-up, while also allowing other creditors to approach the court.
BNP Paribas is among four other foreign lessors and financiers who have filed winding-up petitions against UBHL since March 2012 and who are also challenging the company?s sale of stake in USL to British liquor giant Diageo in July. A separate two-judge bench of the Karnataka High Court has completed the hearing of arguments in their appeal against the stake sale to Diageo and the order is awaited.
On Tuesday, the company court, while posting the next hearing to January 15, said that BNP Paribas can take out newspaper advertisements relating to its winding-up petition after four weeks. UBHL had contested the admission of BNP Paribas? petition on the grounds that it was only an assignee of KF Aero, the special purpose vehicle for the deal, and that the mandatory Reserve Bank of India approval for the guarantee did not extend to it. Besides, it also argued that proceedings were pending in a UK court.
The Karnataka High Court noted that the company had omitted to pay its debt inspite of receiving a valid notice and that it was deemed to be unable to pay its debt under the provisions of the Companies Act. The company, however, can appeal against the admission of the petition. The other winding up petitions are pending admission.
Meanwhile, Kingfisher Airlines is itself fighting several petitions filed against it. The Karnataka High Court has given the airline four weeks to show progress in its attempt to revive operations. The next hearing is on December 6.
Over the past year, UBHL ?which holds Mallya?s stake in other group companies such as United Spirits, United Breweries and Mangalore Chemicals & Fertilizers ? has been fighting several litigations arising from the default of payments by Kingfisher Airlines, which has been grounded for over a year.
A consortium of Indian banks led by State Bank of India has already taken possession of the carrier?s headquarters in Mumbai and has made attempts to take over a Goa villa, besides selling shares pledged as collateral.
