Diageo formally takes over Vijay Mallya’s spirits empire
With a new chief executive officer (CEO) and majority of board seats, UK-based Diageo has taken control of the management of India’s largest spirits company United Spirits Ltd (USL).business Updated: May 02, 2014 15:01 IST
With a new chief executive officer (CEO) and majority of board seats, UK-based Diageo has taken control of the management of India’s largest spirits company United Spirits Ltd (USL).
Anand Kripalu, former Cadbury India chief and FMCG veteran with a long stint at Unilever, formally took over as USL CEO on Thursday, after a six month-stint as CEO-designate.
Diageo picked up a controlling 25.2% stake in USL for 5,236 crore in June 2013 and is looking to increase its stake through an open offer. Chairman Vijay Mallya continues to hold 9.84% after selling a large portion of his stake to the British company.
Diageo has integrated 150 people from its own sales team with USL staff and revamped its compliance division. However, it has chosen a few UB group veterans to run key functions. Ashoke Roy, for instance, who spent 25 years with the UB group, is set to head the compliance division.
“In sales and compliance Diageo has brought in its own standards while by and large maintaining the same set of people in key positions,” a source said. The first move of Diageo was to promote USL chief financial officer (CFO) PA Murali to the board. Subsequently, Paramjit Singh Gill and Amrit Thomas, who were working as deputy presidents, were promoted as presidents in October last year.
Thomas, who has been with USL for eight years, was designated president and chief marketing officer while Gill who is a USL veteran was made president, sales and operations.
After picking up the majority stake, Diageo made its former chief Paul Steven Walsh a member of the USL board and advisor to the chairman and CEO while Mallya continued as chairman. It nominated its Asia-Pacific chief Gilbert Ghostine, finance executive Ravi Rajagopal and four others including Arun Gandhi, Suhdakar Rao, D Shivanandhan and Renu Karnad to the board.
Besides Mallya, Murali and GN Bajpai are USL’s representatives on the board. Another USL representative Ashok Capoor also resigned from the board. However, he would continue as president, strategy till his retirement next year, sources said.
Diageo has the right to appoint CEO and CFO. It has exercised this right in the case of CEO while it promoted the existing CFO to the board. About the appointment of Kripalu, the Diageo spokesperson said, “It was a joint decision”.