Liquor firm United Spirits (USL) on Monday appointed Vinod Rao as the head of finance and V Ramachandran as the company secretary and compliance officer of the firm.
These appointments came in the wake of Diageo-owned United Spirits' board asking its erstwhile promoter and current chairman Vijay Mallya to quit alleging fund diversion to Kingfisher and other UB Group entities.
"The board of directors of the company at its meeting held on April 25, 2015, inter alia, have appointed Vinod Rao as the head of finance of the company with effect from April 25 and V Ramachandran as the company secretary and compliance officer with effect from May 1," USL said in a BSE filing.
Last week, USL executive director and chief financial officer P A Murali resigned from the company for unspecified reasons -- two days before USL's Board concluded its probe to look into loans given by USL to UB Group firms.
On Saturday, the board of USL, in which Diageo has bought a controlling 55% stake for about $3 billion, asked Mallya to step down after "various improprieties and legal violations" were found in a probe into the loans worth Rs 1,337 crore given to UB Group firms.
However, Mallya has rejected the demand for resignation and the charges alleging impropriety.
USL, the erstwhile flagship firm of the UB Group, has seen a number of exits from its board and top management since the probe was launched by Diageo.
USL said that its board took the decision for ouster of Mallya following an "inquiry" report submitted by its MD and CEO, which revealed that between 2010 and 2013, in many transactions funds were diverted from the company and/or its subsidiaries to certain UB Group companies, particularly in Kingfisher Airlines.
The company further said that "in the event Mallya declines to step down, the Board would recommend to the shareholders of the company, the removal of Mallya as a director and as the Chairman of the Board."
USL said it would also initiate necessary steps for recovery of the diverted funds while the role of individuals would be determined by the authorities concerned to whom the company will report all transactions. Internal action would be taken against other employees found to be involved in the matter.
In September last year, the board of United Spirits ordered a probe into the loans given to UB Group companies as it posted a whopping net loss of Rs 4,488.77 crore for the financial year ended March 31, 2014.
'Will discuss the issue bilaterally'
Vijay Mallya, meanwhile, said he will discuss the issue bilaterally with the world's largest spirits maker.
"Diageo has contractual obligation to support me as a Chairman and director on the USL Board. Today, with their statement, they have confirmed it. I will discuss the issue with Diageo bilaterally," Vijay Mallya told PTI.
When asked if he will call for a special shareholders' meeting on the issue, he said: "Let us not speculate. Why should I tell anyone about future course of action. I will discuss with Diageo."
Shadow on USL, UB Group shares
USL shares were down 3.5% on Monday.
After falling 3.87% to Rs 3,281 in intra-day trade on the BSE, shares of United Spirits finally ended at Rs 3,294.35, down 3.49 per cent from its previous close.
On the NSE, it closed 3.45% lower at Rs 3,298.20.
The company's market value went down by Rs 1,729.95 crore to Rs 47,876.05 crore.
Weakness was also seen in stocks of various companies from Mallya-led UB Group. Shares of United Breweries Ltd plunged 12.18%, while United Breweries (Holdings) Ltd tumbled 4.46%.
Kingfisher Airlines' stock fell by 4.86% to Rs 1.76. The stock trades only on Mondays after its suspension.
Shares of UK-based Diageo, which has acquired controlling stake of nearly 55% in USL for $3 billion, also slipped at the London Stock Exchange.