High Court notice to Enforcement Directorate over winding up of UBHL

Bengaluru: The Karnataka High Court on Wednesday issued notice to the Enforcement Directorate (ED) which attached the shares of the United Spirits Limited owned by Vijay Mallya under the Prevention of Money Laundering Act. This was in relation to the appeal filed by the commercially insolvent company United Breweries (Holdings) Limited (UBHL) against the winding up order.

A division bench of Chief Justice Subhro Kamal Mukherjee and Justice P S Dinesh Kumar issued notice to the ED seeking its response, after UBHL informed that it has shares to sell and can deposit the amount.

During the hearing, the counsel for UBHL informed the court that the company is ready to offer more than million USL shares worth `1,200 crore. In addition to this, `1,280 crore deposit plus `108 crore interest accrued on the deposit is available with the court, the counsel said.

But the counsel for consortium of banks drew the attention of the court and said that the shares were attached by the ED.

Taking note of it, the division bench observed that it cannot accept shares as an offer as their value may change anytime. Hence, the bench issued notice to the ED and adjourned the hearing to April 17.

Earlier, the court had suggested to UBHL to come out with a fair offer of deposit to be paid to the consortium of banks and other creditors for one time settlement.

The division bench was hearing the appeal filed by the UBHL against the single bench order dated February 7, 2017, which had ordered the winding up of the firm, on account of its failure to discharge the guarantee obligations.

The single bench had allowed the petitions filed by the International Aero Engines (IAE) and the consortium of banks. They prayed the High Court seeking directions to wind up UBHL to recover the dues payable by the company, which had given the corporate guarantee to the now defunct Kingfisher Airlines Limited (KFAL).

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