How United Spirits gave Diageo a long, heavy hangover
on 29/04/15 at 3:09 pmIndustry
Ever since it struck a $2 billion deal (which became costlier later) to buy a majority stake in United Spirits Ltd in November 2012, Diageo Plc. has been hit by a series of roadblocks and embarrassments in its efforts to clean up the way India’s largest liquor company had gone about its business.
On Saturday, Diageo-controlled United Spirits took its most significant and risky step in breaking away from its past by asking chairman Vijay Mallya to resign from the board after an internal inquiry alleged the liquor baron may have been involved in financial irregularities at the company. Mallya refused to resign and criticized the internal probe, which was led by the Diageo-appointed chief executive officer of United Spirits, Anand Kripalu. Diageo is now reviewing its shareholder pact, which required the company to support Mallya as chairman as long as he controlled at least 1% of United Spirits.