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Vijay Mallya sues banks for selling pledged USL shares

First published: April 2, 2013, 9:43 AM IST | Updated: April 2, 2013
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Vijay Mallya sues banks for selling pledged USL shares
The petition filed by UB seeks a stay on sale of shares of its subsidiary USL by SBI after the bank sold a portion of UB shares it held.

Mumbai: Liquor baron Vijay Mallya has filed a petition in the Bombay High Court against the lenders to his grounded airline Kingfisher for selling a portion of the pledged shares of United Spirits (USL) worth Rs 100 crore, according to banking sources.

The case is listed for hearing at the court of Justice JS Kathawala in the Bombay High Court on Tuesday. The petition, filed by UB Holding in the High Court, seeks a stay on sale of shares of its subsidiary USL by SBI after the bank sold a portion of UB shares it held as security in the market last week, said an SBI official who wanted not to be named.

"We have sold a part of the USL shares. We have also received a legal notice from UB Holding restraining us from doing so. But despite that, we decided to sell them and are likely to sell the remaining shares as well as we are
confident of the court ruling in our favour," said a senior SBI official requesting anonymity.

According to the official, SBI sold shares worth Rs 100 crore last week, which prompted Mallya to seek legal remedy fearing the move could jeopardise his deal with British liquor major Diageo, for which he on Monday announced an open offer
details with the exchanges.

The action by the banks, led by State Bank of India, which is the lead lender to the airline with over Rs 1800 crore dud exposure, is a big jolt to Mallya's plans of reviving the airline as well as completing the stake sale in USL to Diageo, announced last November for over Rs 11,000 crore. The UB Group spokesperson did not respond to phone calls and text messages.

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