| Mallya: Buying out spirit
New Delhi, Sept. 25: UB chairman Vijay Mallya is ready to buy out Kishore Chhabria’s disputed 47 per cent stake in the Rs 500-crore Herbertsons in an all-cash deal as part of an out-of-court settlement.
Mallya and Kishore Chhabria have been locked in a battle for supremacy at Herbertsons, which Kishore joined after breaking up with late brother Manu Chhabria in the early nineties.
In 1992, Mallya inducted Kishore Chhabria as a joint venture partner in Herbertsons Ltd and offered him a 26 per cent stake in the spirits company. In exchange, Kishore Chhabria merged his company BDA with Herbertson as a fully-owned subsidiary company but retained management control on it. The deal also brought the popular Officer’s Choice whiskey into the Herbertsons’ portfolio.
Later, the two partners fell out when Kishore Chhabria started buying up Herbertsons shares from the market, which sparked a spate of suits.
Chhabria had raised his stake in Herbertson by an additional 21 per cent stake through companies owned by his uncle. Mallya then said it was illegal and that he was kept in dark. The Mumbai High Court held the acquisition as void.
Mallya and Chhabria have reportedly had some talks recently in an attempt to reach an out-of-court settlement to the dispute that has raged for several years. Today’s offer by Mallya — he refused to say how much he was prepared to stump up — takes those discussions one step forward.
“I want to buy out (the shares of) Kishore Chhabria in an all-cash deal as part of an out-of-court settlement,” Mallya told reporters here today.
Mallya, who was in town to announce the sponsorship of an upcoming fashion event in Milan by UB’s beer brand Kingfisher, claimed that he had won two rounds in a high court battle against Chhabria. The Supreme Court had also refused to grant Chabbria’s appeal against the high court orders.
“Whenever Chhabria wants to come to the table, we can negotiate an all-cash deal,” he said. Chhabria could not be reached for his comment on the latest overture.
According to Mallya, Sebi had prevented Chhabria from holding more than 10 per cent over and above the 26 per cent he was offered in Herbertsons. Chhabria’s appeal to the Sebi appellate tribunal has been rejected, Mallya said.
Meanwhile, Mallya said UB has picked up a 26 per cent stake in Bangalore-based San Motors and the sports car it produces will be launched as “Kingfisher Storm”.
On a conquest
He came (two hours late), he saw (the waiting journalists for two minutes), he said (on the sidelines) he wants to conquer (Kishore Chhabria by buying him out in an all-cash deal).
And then, Mallya, the liquor baron-turned-Rajya Sabha member of Parliament, rushed to the airport to catch his flight to the “dry” state of Gujarat, where the communal cauldron was re-ignited yesterday when militants stormed the Swaminarayan Temple in Ahmedabad and killed over 40 people.
“What has happened in Gujarat is terrible”, he said about the temple massacre. “It is a shameful incident.” Mallya, who became an MP in April this year, said: “I want to reach Gujarat before Prime minister Atal Bihari Vajpayee reaches there.” He belongs to the Janata Dal United faction, which is headed by Sharad Yadav.