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Sebi Attaches UBHL Bank Accounts, MF Units and Securities

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Sebi Attaches UBHL Bank Accounts, MF Units and Securities
Says Mallya-owned co defaulted on ?15 L penalty imposed by regulator in 2015

The Securities and Exchange Board of India has attached all bank accounts, securities and mutual fund units held by Vijay Mallya-owned United Breweries Holdings Limited (UBHL).The regulator said UBHL has defaulted on the payment of a penalty imposed by it in 2015. It has directed banks, depositories and mutual funds not to allow any debit in their accounts. However, credits have been allowed.

Sebi had imposed a penalty of ?15 lakh in 2015 for disclosure lapses by United Breweries Holdings. The regulator said United Breweries is liable to pay the amount along with an interest of 12% per annum (from Nov 27, 2015 to Nov 13, 2017), which adds up to ?3.5 lakh, and a recovery cost of ?1,000, a total of ?18.5 lakh.

“There is sufficient reason to believe that the defaulter may dispose of the amounts in the bank accounts/securities in the demat accounts held with your bank/depository/mutual fund and realisation of amount due under the certificate would in consequence be delayed or obstructed,” Sebi said in its notice.

“I hereby order to attach with immediate effect... all accounts by whatever name, including lockers of the defaulter (United Breweries Holdings Limited), held either singly or jointly with any other person, in your bank,” Sebi said in its notice to all banks in the country.

Details of Loan Accounts

The regulator has also asked banks, depositories and mutual funds to provide details of all accounts held by United Breweries Holdings with them, including copy of account statements for the past one year. It has also sought complete information of all loan accounts and collaterals.
“If the party defaults on payment of penalty and Sebi’s order is not challenged before any appellate authority or the appeal is dismissed, then Sebi can attach the assets to recover the dues,” said RS Loona, managing partner of Alliance Law and a former executive director of Sebi.
An email sent to Mallya went unanswered at the time of going to press. Top officials close to the development said multiple government agencies are tightening the noose around Mallya to recover dues and strengthen his extradition case. “The government is not letting go of any opportunity to get Mallya back to India. The Sebi attachment is another such move,” an official said.
In early 2017, the Karnataka High Court ordered the winding-up of United Breweries for recovering dues payable by the defunct Kingfisher Airlines by allowing petitions by banks and aircraft lessors.Mallya owns a 52.34% stake in UBHL. The company had given corporate guarantees for loans to run Kingfisher and also several other group companies.
CBI has issued a non-bailable warrant against Mallya in the Rs 720-crore IDBI Bank loan default case and sought his extradition from the UK. The Debt Recovery Tribunal had ordered an SBI-led consortium of banks to start the process of recovering over Rs 9,000 crore from the be leaguered liquor tycoon.
The Economic Times, New Delhi, 16th November 2017

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