United Spirits faces heat of Chidambaram's arrest
The Enforcement Department is investigating alleged irregularities in Foreign Investment Promotion Board (FIPB) approvals to four companies including Diageo Scotland given by former Finance Minister P Chidambaram. Diageo Scotland is a subsidiary of United Spirits Limited's parent company Diageo. The probe agency believes that Chidambaram received kickbacks of around Rs. 300 crore for the illegal clearances via shell companies belonging by his son Karti Chidambaram.
The stock is facing the heat because United Spirits has a sizable transaction of Scotch and royalties with Diageo Scotland. In November 2012, UK-based Diageo brought 53.4 per cent stake in Vijay Mallya promoted brewery United Spirits for Rs. 11,166.5 crore.
The company's promoter Relay B.V acquired shares of the company through a block trade at Rs. 591.95 per share on Wednesday. Post the acquisition, the promoter holding has increased to 55.24 per cent. Relay B V is an indirect wholly-owned subsidiary of Diageo Plc.
Earlier on Tuesday, the Debt Recovery Tribunal sold a total of 33.1 lakh shares of United Spirits at a price of Rs. 591.95 per share to monetise Rs. 195.96 crore.
On Thursday, the stock of United Spirits Limited closed at Rs. 564.80 per share, down by Rs. 13.95 or 2.41 per cent on BSE.