In a setback to United Breweries Holdings Ltd (UBHL), a Division Bench of the Karnataka High Court has imposed conditions on the company by asking it not to transfer or part with possession in respect of any of its assets.

The Division Bench, comprising Justice D.V. Shylendra Kumar and Justice B.S. Indrakala, passed the interim order on an appeal filed by BNP Paribas, which had financed Kingfisher Airlines Ltd (KAL) through KF Aero, to acquire three aircrafts. In the appeal, the creditor has questioned the May 24 order of a single judge Bench permitting UBHL to sell 1.36 crore shares of United Spirits Ltd (USL) held by it (UBHL) to Diageo Plc.

The Division Bench also ordered issue of notices on the application to make Diageo, which has already purchased 1.36 crore shares of USL from UB, as a party in the litigation.

The single judge Bench, which is hearing petitions seeking the winding up of UBHL and Kingfisher, had already imposed other conditions, which BNP Paribas claimed as insufficient to protect the interest of the creditors.

It has been alleged in the appeal that the single judge had allowed sale of shares without conducting proper investigation into the certain huge transactions of the UBHL and without taking sufficient steps to protect the interest of the general body of the creditors of Kingfisher, which is owned by UBHL, and without ensuring that the sale of shares work out in favour of the creditors of UBHL.

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