Vijay Mallya cannot access $75-million payout from Diageo

In a major setback for Vijay Mallya, the Debt Recovery Tribunal (DRT) on Monday said the UB Group promoter will not get access to the $75-million settlement he received from Diageo till the case with the State Bank of India is settled.

Diageo has been asked not the disburse the money for now. The tribunal set March 28 as the next date of hearing. The ruling is a temporary reprieve for the SBI, which had sought DRI's intervention in seeking the lenders' first right on the $75-million payout from Diageo to Mallya under a recent deal.

SBI had filed three other applications, including one seeking Mallya's arrest and impounding of his passport, as the bank approached DRT seeking action against him for defaulting on loans.

Mallya and Kingfisher Airlines owed Rs 7,800 crore to a consortium of 17 lenders led by SBI which had an exposure of over Rs 1,600 crore to the now defunct airline. Since January 2012, the loan was not serviced.

Other lenders include Punjab National Bank, Bank of Baroda, Canara Bank, Bank of India, Central Bank of India, Federal Bank, Uco Bank and Dena Bank among others.

Last year, SBI declared Mallya as willful defaulter.

Last month, Punjab National Bank had also declared him, his group holding company United Breweries Holdings and the long-defunct Kingfisher Airlines as willful defaulters.

As part of a deal, Diageo said it would pay $40 million immediately to Mallya with the balance being payable in equal installments over the next five years.

It will also absolve Mallya of all liabilities over alleged financial lapses at the company founded by his family.