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The Karnataka High Court, on Wednesday, ordered issue of notice to the Enforcement Directorate (ED) on a proposal made by the United Breweries (Holdings) Ltd that around ₹1,200 crore could be realised by selling about 41 lakh shares of United Spirits Ltd (USL), held by the UBHL which were seized by the ED in a money laundering case against Vijay Mallya.
A Division Bench comprising Chief Justice Subhro Kamal Mukherjee and Justice PS Dinesh Kumar passed the order seeking the ED’s view on the proposal, submitted by the UBHL with a view to deposit a portion of the total loan of ₹10,000 crore due to consortium of banks, to demonstrate that the company is a going concern so that the court would hear company’s appeal against the order for winding up.
Senior Counsel Uday Holla, appearing for UBHL, said that around ₹1,200 crore could be realised if these shares are sold in the present market rate.
However, the Bench said that it would be difficult to rely on the present market value of the shares and orally suggested that one of the promoters of the company could come forward to buy these shares.
Meanwhile, Senior Counsel SS Naganand, appearing for consortium of banks, pointed out that these shares cannot be sold as ED has attached them in a case registered under the Prevention of Money Launder Act.
While Holla said that the case was registered based on the complaint filed by the banks, Naganand said that the banks have nothing to do with the case registered under the PML Act as it was a suo motu action of the ED.
Following this, the Bench decided to seek the view of the ED on UBHL’s proposal to sell the shares.
On the other hand, a counsel representing some employees of the UBHL sought the court’s permission to be part of the proceedings and sought a direction to release ₹5 crore, out of ₹1,388 crore deposit available with the court, for disbursement of pay as they were not paid for the past two months. However, counsel for banks termed the employees’ plea as “abuse” of court proceedings.
The Bench adjourned further hearing till April 17.
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