What Happened To $40-Million Diageo Payout, Supreme Court Asks Vijay Mallya

The Supreme Court on Tuesday lashed out at Vijay Mallya for not disclosing information about the $40 million payout from U.K.-based firm Diageo. The apex court gave Mallya time till November 24 to make proper disclosures with regard to all his overseas properties.

The court was referring to the $40 million Mallya received in hand as part of his exit from the Diageo-controlled United Spirits Ltd. in February this year. The total payout to him stood at $75 million over five years.

A consortium of 17 banks, including State Bank of India, had filed a contempt plea against Mallya, arguing that he has not been candid with the court regarding his assets and cited his failure to disclose the severance package he received from Diageo.

The consortium has also been pressing for Mallya’s presence in the Supreme Court in the ongoing contempt proceedings related to the Rs 9,000 crore loan default case.

On April 26, the Supreme Court had directed Mallya to disclose his assets to the consortium. But banks say that disclosures made by Mallya thereafter on his Indian and overseas properties were “vague”.

The Attorney General for India argued on Tuesday that all disclosures made by Mallya about his overseas properties lacked details. "The statement mentions cars but not the number of cars, houses but not the number of houses, mentions bank accounts in some country but does not give details. All this was done to deceive the court and banks," he argued.

Vijay Mallya's counsel refuted allegations of non disclosure, saying, "We gave information about all assets details as of March 2016 as directed by the court. We are not in contempt. The question on what has been done with $40 million is different from disclosure of assets," Senior Advocate CS Vaidyanathan argued on behalf of Mallya.

However, the court rejected this argument, with Justice Rohinton Nariman observing that if Mallya "wanted to come clean he would have explained what happened with the $40 million transaction."

Vaidyanathan responded that banks were aware of the Diageo transaction and Mallya had not hidden details about the same.

The Attorney General urged the court to give appropriate punishment to Mallya for not appearing before the court till date and for misleading the court about the disclosure of properties. The banks have already sought arrest warrants against Mallya for misleading the court.

Mallya filed a fresh application last month seeking recall of notice issued by the apex court on banks’ contempt plea. However, the court passed no orders on the banks’ contempt plea and will consider the same on November 24, following Mallya's disclosure on overseas properties and the $40 million transaction with Diageo.