Finding prima facie evidence of non-compliance to various norms including on insider trading and corporate governance, Sebi has widened its probe into dealings of Vijay Mallya-led UB Group, including in its own shares and with UK-based Diageo and other foreign players.
The capital markets watchdog may also seek information from other regulators in India and abroad, as also from the stock exchanges, as it seeks to de-clog the complex transactions Mallya had entered into, including for sale of stake and transfer of rights in his various group companies.
Details and clarifications have also been sought from all the concerned parties including the present and erstwhile UB Group firms as well as from the foreign companies with whom Mallya had dealt with for sale of controlling stake in United Spirits Ltd to Diageo, a senior official said.
Sebi began looking into Mallya-Diageo transactions last month soon after the flamboyant businessman inked a Rs 515- crore ‘sweetheart deal’ to exit United Spirits, suspecting possible violations of corporate governance and other norms.
Regulatory sources said that Sebi has found prima-facie evidence of non-compliance to various transactions, while it has also stepped up its cooperation with other regulators and agencies that are separately looking into alleged violations in relation to the massive loans taken by the erstwhile Kingfisher Airlines of UB Group.
A huge controversy cropped up after Mallya left India within days of his ‘exit deal’ with Diageo, which has already paid more than half of the total amount it has to pay to the businessman, who has been known as ‘King of Good Times’.
Detailed queries sent to Mallya, including about his possible return to India and also on the prima-facie evidence found by Sebi, did not elicit any response.
Sebi is looking into the role of United Spirits and its main promoter Diageo Plc, as also that of Mallya and his group firms that are or have been shareholders in India’s leading liquor maker.
Besides, the regulator is also looking into the trading data for USL shares to check whether there have been any violation of insider trading norms or other irregularities.
The Corporate Affairs Ministry and others may also join in as the deal raised “serious doubts” about whether the corporate governance norms have been followed in “letter and spirit” in this matter. The Serious Fraud Investigation Office (SFIO) is already separately probing Kingfisher for alleged financial irregularities and fund diversion.
The ambit of the probe by various regulators and agencies also includes the alleged financial irregularities at USL relating to loans advanced to UB firms including for long-defunct Kingfisher Airlines.