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Bankruptcy, extradition, but Vijay Mallya's next big worry is 'brewing' at UB Group

The erstwhile liquor baron stares at loss of throne at the 'Kingfisher' high table

Mallya 'devastated' to lose control of Force India F1 team [File] The chairman post at UB is Vijay Mallya's last post that he holds in any listed Indian corporate | Reuters

Vijay Mallya's cup of woes spilleth over. For the erstwhile liquor baron, who hit headlines earlier this week after a UK Court declared him bankrupt, bigger battles are still in the offing, including a loss of his throne at the 'Kingfisher' high table.

Beyond the rumoured 'political asylum' application he is supposed to have filed in Britain, failing which he will be extradited to India for a sure-fire jail term, Mallya has other worries. This relates to his last vestige in the world of business. The buzz is that Mallya could well be removed from his chairman post at United Breweries (UB) when its annual general body meeting (AGM) gets underway soon.

This could mean the end of the road in Indian business for the flamboyant Mallya who, till less than a decade ago, had anointed himself in an a la desi 'Richard Branson' avatar to take to the skies straddling businesses ranging from liquor to aviation with a side detour even into politics. But the vagaries of politics and business, and the often invisible but precarious crossroads of the two saw him instead crash down to the ground – the tail dive of his Kingfisher Airlines and its debt trap was enough to have a lethal domino effect on the Vijay Mallya 'brandwagon'. The Bengaluru tycoon himself had to flee to the UK to escape the wrath of the law enforcement agencies, a fight that continues to play out in the British courts.

The chairman post at UB is the last post he holds in any listed Indian corporate – he had to resign from the UBL Board four years ago after the Securities and Exchange Board (SEBI) disqualified him from being a director of any publicly traded company.

UB is the absolute market leader in beer and brewing in India, with its iconic brand 'Kingfisher' recognised the world over. And, despite being away from the country and not involved in running the business on a day-to-day business, Mallya remains, on paper, the 'chairman for life' at UB. It's part of his deal when stakes were sold (originally to Scottish & Newcastle, which was later acquired by the Dutch beer giant Heineken).

However, that could change now. The main reason for this is Heineken's acquisition of Mallya's shares through the Debt Recovery Tribunal recently, which has now made it the majority stakeholder in the company. Heineken's shares, when it first entered the company, were below 40 per cent, and have now peaked at above 60 per cent now.

Even then, it may not be easy – removing a chairman requires 75 per cent of the shareholders voting for it. Heineken will have to put up a resolution at the AGM to change the Article of Association (AoA) so that it can nominate a new chairman – current rules have Mallya firmly ensconced as chairman for life and has the sole authority to nominate a successor. Chances of an agreement between the two entities so that Mallya could bow out gracefully, and even have someone he approves of as the new chairman, cannot also be ruled out.

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