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Mallya and his group firms are already facing a probe by Enforcement Directorate for alleged diversion of loans taken by long-grounded Kingfisher Airlines
In mounting troubles for embattled Vijay Mallya, markets regulator Sebi has stepped up its probe into alleged fund diversion from his erstwhile listed group firms to other entities, including some abroad and his various sport ventures.
With the latest disclosures taking total suspected fund diversion at United Spirits alone to over Rs 2,500 crore (Rs 25 billion), Sebi is also referring to the matter for further action by other agencies including SFIO (Serious Fraud Investigation Office) under the corporate affairs ministry, a top official said.
"We have taken note of the latest disclosure by USL and have begun looking into suspected violation of various securities market regulations including those relating to related party transactions, corporate governance and diversion of funds by promoters and top management," he said.
"Also under the scanner are Mallya's close confidantes and others who were at senior levels at various listed companies of the group, as also some former auditors at certain group firms," the official said.
Action is already underway for violation of listing agreement by some group companies, he added.
The matter of fund diversion would also need to be looked into by SFIO, while ED would also come into the picture as the funds are suspected to have been diverted to entities abroad, the official said, adding that necessary assistance would be sought from foreign regulators including in the UK and the US, where his overseas brewery firms and other ventures are based.
Mallya and his group firms are already facing a probe by Enforcement Directorate for alleged diversion of loans taken by long-grounded Kingfisher Airlines.
Sebi has also received complaints about the alleged use of overseas instruments in violation of norms for movement of funds and the matter is being separately looked into.
In a statement, Mallya denied any wrongdoing as alleged by USL, in which he had sold the controlling stake to UK-based liquor giant Diageo in 2013 in a multi-billion dollar deal, and said all the transactions were 'legal and above board'.
Serving a fresh blow to Mallya, USL on Saturday disclosed fund diversion and improper transactions worth Rs 1,225.3 crore (Rs 12.25 billion) involving entities linked to the former chairman, including Kingfisher Airlines and his Formula One team.
The company also made it clear that the earlier settlement reached with the Indian businessman would not absolve him of the claims arising out of the latest findings of an internal 'Additional Inquiry'.
Mallya, who has been in UK for months evading an arrest warrant in India while several banks have declared him 'wilful defaulter' for non-payment of dues worth over Rs 9,000 crore (Rs 90 billion) by his now-defunct Kingfisher, had struck a settlement with USL in February. Under the 'sweetheart deal', he was promised an over Rs 500-crore (Rs 5 billion) payout to leave the company and was also absolved of any 'personal liability' at that time.
USL board had ordered an 'additional inquiry' to plug gaps found in an initial probe launched in April 2015 that showed improprieties in loans worth Rs 1,337 crore (Rs 13.37 billion) given by USL to the entities linked to its erstwhile promoters.
"The additional inquiry prima facie reveals further instances of actual or potential fund diversions amounting to approximately Rs 913.5 crore (using exchange rate as on March 31, 2015) as well as other potentially improper transaction involved USL and its Indian and overseas subsidiaries amounting approximately Rs 311.8 crore," USL said.