United Spirits shareholders stand by troubled Vijay Mallya

Despite warnings from credit rating agencies, shareholders of United Spirits Ltd have re-elected Vijay Mallya as chairman, with no opposition candidate.

Mallya, 58, had come under severe flak from proxy shareholder advisory firms in the country, who called on USL shareholders to vote against his reappointment following his business failures especially in regard to Kingfisher Airlines, where lenders are dunning him for millions (See: Don't reappoint Mallya, advisory firms urge USL shareholders).

The flamboyant Mallya, bejewelled in his grandmother's diamond earings and VJM cufflinks among other bling, didn't have to face a single shareholder question or opposition to his re-election.

Shareholders who attended the AGM had cast their vote through a secret ballot, while those who stayed away did so through e-voting. The final results of the ballot are expected in the next couple of days, but without opposition, there can be no other 'winner'.

Mallya holds less than a 5-per cent stake in USL, while Diageo has a controlling 54.78-per cent in the $6-billion Bangalore-based spirits firm.

Last week, the Calcutta High court stayed the 'wilful defaulter' tag sought to be placed on him by United Bank of India, one of Kingfisher's lenders, making the annual general meeting easier for Mallya.

"We've been vindicated by the fact that we have secured two stays from two separate high courts in this country," Mallya said while addressing USL shareholders at Bangalore's UB Towers, the headquarters of UB Group and USL.

In context to the inquiry setup by the USL board Mallya said he wanted to clarify to shareholders that it was not a USL / Diageo versus UB Group investigation, which it is being made out to be. "That investigation will be conducted in a fair and transparent manner and will be reported to the board," he said. And was quick to add that "for the media to continuously suggest that there is some sort of a rift between USL / Diageo and the UB Group is unfortunate, and hopelessly incorrect."

Hours before the USL AGM, Mallya's son, Siddharth Mallya, was re-appointed as director of UB Holdings, the parent listed entity of the UB Group. Siddharth's appointment happened at the UBHL AGM, where Mallya told shareholders that 'as a matter of prudence' UBHL had to write-off a staggering Rs2,000 crore in the last fiscal.