Business

Indian tycoon blocked from $75m payout over Kingfisher debt

Vijay Image copyright Getty Images

Indian drinks baron Vijay Mallya has been blocked from receiving $75m (£53m) severance pay from Diageo.

The heavily indebted businessman was to receive the money as settlement after being ousted from the firm in February.

But a consortium of banks and creditors has demanded the money should be used to settle Mr Mallya's outstanding debt to them.

The businessman is said to have some $1.4bn of unpaid debts after his Kingfisher airline collapsed in 2013.

A debt recovery tribunal on Monday blocked the payment and will review the case again on March 28.

Image copyright AFP
Image caption Kingfisher was grounded in 2012, defunct in 2013

"Diageo and United Spirits Ltd shall not temporarily disburse the amount to Mallya," the presiding officer of the debt recovery tribunal said in his order.

Mr Mallya had been due to receive $40m of the settlement immediately and the remainder over the course of five years.

In 2012 his Kingfisher airline was unable to pay staff, airports, tax authorities and lenders, having lost money for five years in a row.

A consortium of banks and creditors also sought Mr Mallya's arrest and asked for his passport to be impounded after he said that he wanted to move to Britain to be closer to his children.

The flamboyant businessman, who is a household name in India, sold a large chunk of United Spirits, which he inherited from his father, to Diageo in April 2014.

But the UK-based drinks giant had been reportedly trying to oust him as chairman after an internal inquiry found financial irregularities.

Image copyright AFP
Image caption The flamboyant tycoon also owns a F1 team

Mr Mallya, once dubbed by Indian media as "India's Richard Branson" and the "King of Good Times" for his lavish lifestyle also owns a stake in the Formula One team Force India.

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