India: Heineken seeking approval to replace Vijay Mallya as United Breweries chairman

Heineken International that increased its shareholding in United Breweries from 46.5 per cent to 61.5 per cent recently is seeking approval of shareholders to change the company�s Articles of Association (AoA) that will enable it to nominate a chairman, Business Today reported on July 6.

Fugitive liquor baron Vijay Mallya is the chairman for life and has sole authority to nominate a successor. Heineken had, a few days ago, acquired Mallya�s shares from the Debt Recovery Tribunal to increase its shareholding in the company.

Heineken is scheduled to seek approval at UBL�s annual general meeting scheduled for July 29. In case Mallya agrees to change the existing shareholder agreement ahead of the AGM, the beer maker might call off the resolution, stated a report in The Economic Times.

While Heineken is the majority shareholder, the AoA currently mandates 75 per cent shareholding to seek approval from shareholders through an AGM. Nevertheless, Heineken has reportedly discussed the issues with financial institutions.

The original agreement signed between Mallya and erstwhile partner Scottish & Newscastle, which was acquired by Heineken in 2008 is yet to be changed.

Mallya resigned from the UBL board in 2017 after SEBI disqualified him from becoming a director of a listed company. The liquor baron is currently in the UK and is fighting extradition attempts by Indian regulators.

UBL that was owned by Mallya, is the maker of India�s top-selling Kingfisher lager. Vijay Mallya took out over $1.4 billion of loans from Indian banks which authorities argue he has no intention of repaying. The banks took possession of the stake and Competition Commission of India approved Heineken�s proposed acquisition of additional equity last month. Heineken has steadily been building its stake in UBL since taking an initial 37.5 per cent through its 2008 acquisition of Scottish & Newcastle.