Vijay Mallaya Receives Rs. 515 Crore For Walking Away From United Spirits

In what is being seen as a surprising turn of events,  Vijay Mallaya has announced that he’s resigned as Chairman of United Spirits. The company, which is now controlled by British multinational Diageo, has agreed to drop all charges of irregularities under his watch. Mallaya will also receive Rs. 515 crore over 5 years in return for stepping aside. United Spirits’ shares surged 6% following the announcement.

vijay mallaya

“Having recently turned 60, I have decided to spend more time in England, closer to my children,” Mallya said in a statement. He now has no controlling stake in any major company at this point.

Trouble had been brewing at United Spirits ever since Diageo acquired a majority stake (57%) in the company in July 2014. Diageo had been pushing for Mallaya’s removal as chairman, but he had refused to step down. 

Mallya’s resignation comes at a time when State Bank of India and Punjab National Bank have declared him a wilful defaulter because of his inability to pay dues to as many as 17 banks which amount to Rs.7,000 crore. The loans were taken by Kingfisher Airlines. The airline had stopped operations in February 2013 following a tumultuous period in which it had been unable to pay salaries and run flights.

Mallaya, who is known for his flamboyant lifestyle, will continue to be the Chief Mentor of the Royal Challengers Bangalore, and his son Siddharth will continue as Director for the cricket franchise.