London:&nbsp;Flamboyant businessman Vijay Mallya&nbsp;will get USD 75 million (Rs 515 crore) from Diageo as part of&nbsp;an "agreement" for his exit from United Spirits, a company&nbsp;founded by his family and now run by the global liquor giant.
Besides, Diageo has agreed that Mallya will have no&nbsp;"personal liability" to the UK-based company in relation to&nbsp;the findings of the alleged financial irregularities at the&nbsp;company that had triggered an acrimonious fight between them.
These allegations, which surfaced after an internal inquiry,&nbsp;related to the period before Diageo acquired controlling stake&nbsp;in United Spirits Ltd (USL) from the Mallya family.
<img src="http://images.mid-day.com/images/images/2016/feb/25mallya.jpg" alt="Vijay Mallya" />Vijay Mallya
Under the agreement, Mallya will resign as Chairman and&nbsp;non-executive director of USL, as also from the boards of&nbsp;other USL group companies.&nbsp;However, his son Siddharth Mallya would remain on the&nbsp;board of the USL group company which holds the Royal&nbsp;Challengers Bangalore IPL franchise and Diageo can not "seek&nbsp;to remove him from that board for a period of two years". Vijay Mallya will have honorary title of the team's Chief Mentor.
Mahendra Kumar Sharma, an independent director, will be&nbsp;the new chairman of United Spirits.
Giving details of the agreement reached with Mallya,&nbsp;Diageo said it has "agreed to pay USD 75 million to Mallya in&nbsp;consideration for his resignation and the termination of his&nbsp;appointment and governance rights and his relinquishing of the&nbsp;rights and benefits attached to his position as Chairman and&nbsp;non-executive director", among other factors.&nbsp;
The payment is also for "his agreement to five-year&nbsp;global non-compete (excluding the UK), non-interference,&nbsp;non-solicitation and standstill undertakings, and his&nbsp;agreement that he and his affiliates will not pursue any&nbsp;claims against Diageo, USL and their affiliates".&nbsp;
Diageo said it will pay USD 40 million of this amount&nbsp;immediately with the balance being payable in equal&nbsp;instalments over five years.
Separately, Diageo has agreed that Mallya will have no&nbsp;personal liability to Diageo in relation to the findings of&nbsp;the inquiry by USL (announced on 25 April 2015) into certain&nbsp;matters referred to in its financial statements and the&nbsp;qualified auditor's report for the financial year ended March 31, 2014, and its prior agreement with Mallya regarding his&nbsp;position at USL.
Diageo also said it has extended Smirnoff's sponsorship&nbsp;of the Force India Formula 1 team of which Mallya is team&nbsp;principal and part-owner for the next five seasons.&nbsp;
The cost of this sponsorship continues to be USD 15&nbsp;million per season.
Commenting on the agreement with Mallya, Diageo's CEO&nbsp;Ivan Menezes said, "India is an exciting growth opportunity,&nbsp;and USL has the management team, strategy and capability to&nbsp;deliver on that opportunity. The agreement announced today is&nbsp;in the best interests of both Diageo and USL and allows USL to&nbsp;build on its strong platform in one of the biggest spirits&nbsp;markets in the world."

Flamboyant businessman Vijay Mallya&nbsp;will get USD 75 million (Rs 515 crore) from Diageo as part of&nbsp;an "agreement" for his exit from United Spirits, a company&nbsp;founded by his family and now run by the global liquor giant

Diageo to pay Vijay Mallya over Rs 515 cr as separation fee

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Home / News / India News / Article / Diageo to pay Vijay Mallya over Rs 515 cr as separation fee

Diageo to pay Vijay Mallya over Rs 515 cr as separation fee

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