United Breweries: McDowell shareholders, creditors clamor for Rs 920 cr UB shares

Mumbai: There is a fight going on between the shareholders of and lender Control of a company that is worth hundreds of crores Rupees Amidst allegations of attempts by fugitive borrower Vijay Mallya by proxy to reclaim the entity which was once a holding company for various businesses of his family.

shareholders of McDowell Holdings has decided to invoke Section 12 of the Insolvency and Bankruptcy Code to pay ₹16.8 crore dues to Sunstar Hotels and Estates for refusing to accept payment by the creditor as part of settlement of the insolvency process. After, said people familiar with the matter. Section 12A of the Insolvency and Bankruptcy Code (IBC) provides for payment of dues by promoters for withdrawal of proceedings, provided 90% of the creditors agree to it.

A group of minority shareholders of McDowell Holdings including Neeraj Paul, Kushal Sengupta and several others have moved the Supreme Court against the National Company Law Tribunal (NCLT) decision admitting insolvency proceedings against the company.

These shareholders allege that there was little need for the company to borrow and default because it was a holding company. They allege that this was done by design to grab control of the company, which has shares worth ₹920 crore.

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Porinju Veliyath said, “It appears that there is a team led by the former CFO of the company and some entities linked to Mallya, to take control of the company, to take away about Rs 1,000 crore of their investments in United Breweries and other companies.” trying to achieve.” , Founder and MD, Equity Intelligence. He directly controls about 5% of the company.

McDowell did not respond to ET’s question.

In April this year, the Bengaluru Bench of the NCLT allowed a petition filed by Sun Star Hotels and Estate, a financial creditor of the erstwhile Vijay Mallya-promoted McDowell Holdings, that claimed default of ₹16.80 crore. The Insolvency Tribunal has also appointed KR Raju as interim resolution professional of the company.

Though the company has no business, it holds 6.3 million shares worth Rs 920 crore in United Breweries. But these shares are either pledged or attached by the Enforcement Directorate. The minority shareholders solicit the company to sell the shares of United Breweries and distribute the money to the shareholders.

In the NCLT, the minority shareholders argued that the corporate debtor is not an insolvent company and has sufficient means to repay the debt.

Earlier this year, a group of minority shareholders, including Equity Intelligence of US-based private investment firm Acacia Partners and Porinju Veliyath, requested an extraordinary general meeting and appointed five members to the board after stock exchanges suspended their trading. proposed to do. Investors have accused the current management of acting against 47,000 shareholders by not appointing board members on time.

In a letter dated February 16, nine large investors holding 15% of the total voting rights, have called an EGM and proposed the names of former MDs and CEOs.

PS Jayakumar, Jiby Jose, Ed. Bobby Arkunell, ed. VM Doifode and Neeraj Paul are the members of the board. The company has not yet called the EGM.

Legally, the board must have at least three members. In December last year, shareholders voted for three board members, leaving the company with only two board members. On January 18, NSE had given a one-month suspension notice citing insufficient number of directors. As the company did not act, its shares were suspended from trading on NSE and BSE with effect from February 18.