The internal investigations of the United Spirits Limited (USL), who are the owners of the Indian Premier League (IPL) franchise, Royal Challengers Bangalore (RCB), has revealed that they were indulged in some financial wrong-doings. This is not the first time an IPL team has been speculated to be involved in something of this sort.
USL was a company owned by Vijay Mallya, who was also the owner of Royal Challengers Sports Pvt Ltd (RSCPL) – the parent company of the RCB squad. It has now been owned by the British beverage company Diageo, which is the largest shareholder in RCSPL. In 2014, when the recovery of securities took place, the new owner started to conduct inspections into the financial wrong-doings in the accounts of USL.
The reports of Business Standard states that their 2016-2017 financial statements filed before the controllers, states that an enormous sum of INR 1.15 billion, or INR 115 crores, being “potentially diverted from Royal Challengers Sports Private Limited”. The report also mentioned that the possible discrepancy took place in between October 2010 and July 2014 – a period when the company was under the ownership of Vijay Mallya.
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Some of the initial investigations started by the MD and CEO of Diageo, months after buying most of the stakes in USL. The investigation also put down the fact that there were large financial wrong-doings in the funds between 2010 and 2013, a majority of them being transported to Kingfisher Airlines or some other company. But all of them had one thing in common – they were all part of Mallya’s United Breweries Group.
According to the company’s filings, “between 2010 and 2013, funds involved in many of the transactions that were analyzed had been diverted from USL and/or its subsidiaries to certain companies in the United Breweries Group, including, in particular, Kingfisher Airlines Limited.”
A follow up on the previous inquiry, that ended in July 2016, went on to reveal that around INR 1,200 crores had been redirected from USL’s accounts to some other overseas accounts and the investigators are establishing that these establishments are connected to the former owner Vijay Mallya, once again.
To make things more suspicious, Mallya’s son Siddharth Mallya, who was the non-executive director at RPSCL until February 2018, resigned from his position in 2017, almost 9 months before he was scheduled to, and he also did not attend any of the board meetings between 2015 and 2017.
