Beleaguered liquor baron Vijay Mallya has moved Securities and Appellate Tribunal (SAT) challenging market regulator Securities and Exchange Board of India (Sebi) order which has barred him from securities market for allegedly diverting funds to the tune of Rs 1,880 crore from United Spirits (USL).
The market regulator on January 25 passed an order against Mallya and six other entities, for violating Sebi's (prohibition of fraudulent and unfair trade practices) regulations.
SAT on Friday adjourned the matter, making it the second time Mallya's case has been adjourned by the appellate tribunal.
The regulator had given 21 days for USL to provide information on steps taken by the company to recover the fund from Mallya and companies to which the amount has been diverted.
Mallya had hit out at the Sebi order, terming the charges baseless. He tweeted, "Allegations of fund diversion out of USL are baseless. USL account was approved by top auditors, an eminent board of directors, shareholders."
Sebi in the order said that violation was serious and have larger implications on the safety and integrity of the securities market. By diverting substantial funds from USL to companies of the UB Group, Mallya and other key managerial persons (KMPs) have engaged in an act or practice which prima facie operated as a fraud or deceit on the public shareholder/investors of USL," Sebi said in a 32-page order.
Citing reports from consultancies PwC and Ernst & Young, which examined transactions involving USL and Mallya-owned UB Group companies, Sebi had said those banned were prima facie alleged to have committed fraudulent and unfair activities prohibited under various sections of PFUTP act.
It is said to have also examining the role of the auditors in question, for failure to detect such a significant diversion from USL to UB Group companies and the now-defunct Kingfisher Airlines (KFA).
Sebi also said it is separately examining the settlement agreement worth $75 million between Mallya and USL, following which he had resigned as chairman and director. As on March 2016, Mallya held the chairman's position in United Breweries, United Breweries (Holdings) and KFA.