has sued businessman Vijay Mallya to recover a $40 million payment made when he was ousted from United Spirits Ltd, the UK spirits maker’s Indian unit, last year, Bloomberg reported on Friday.
Diageo filed the suit in London on Tuesday after setting out the grievances it has against Mallya in its annual report in August, the report said.
The spirits maker claims Mallya breached a $75 million agreement, of which it had already paid out $40 million, made when he stepped down as chairman of United Spirits in February 2016, Bloomberg said.
It’s also seeking about $141 million over questionable payments made by companies affiliated to Mallya. His son, Sidhartha, is also named in the suit, according to Bloomberg.
Mallya flew to the UK in March 2016 as Indian lenders to his defunct Kingfisher Airlines Ltd moved in on him, following the payment made by Diageo, to recover Rs.9,100 crore they claim the airline owed them.
The $75 million payment Diageo agreed to pay over five years was part of a sweetheart deal under which Mallya agreed to leave United Spirits and not compete or interfere with it for five years. Diageo also said it would release Mallya from liabilities flagged in an internal report.
Diageo has amassed a 55% stake in United Spirits since it first purchased a share of the Indian whiskey producer in 2013.
“Diageo is pursuing substantial repayment and compensation from Dr Vijay Mallya and certain of his affiliate companies,” Bloomberg quoted a spokeswoman for Diageo as saying in a statement. “They include seeking compensation from Dr. Mallya for breaches of the agreements announced in February 2016 that ended his association with United Spirits.”
The Diageo suit comes as Mallya prepares for an extradition hearing in London next month over allegations that he committed a billion-dollar fraud.
Mallya, who has been released on bail, told Bloomberg in a phone interview on Friday that the Diageo suit was being reviewed by his lawyers and he would defend any action brought against him. He also denied the allegations related to the Indian fraud charges.