Royal Challengers under cloud? Mallya ‘took’ loan against the IPL team
As the drama unfolds around Vijay Mallya’s escape to London, clouds of uncertainty loom over Virat Kohli’s IPL team, Royal Challengers Bangalore (RCB).Updated: Mar 11, 2016 08:32 IST
As the drama unfolds around Vijay Mallya’s escape to London and banks struggle to recover thousands of crores in outstanding dues, clouds of uncertainty loom over Virat Kohli’s IPL team, Royal Challengers Bangalore (RCB)
Document suggests that Mallya took a fat loan against the franchise also.
Mallya bought the Indian Premier League (IPL) franchise in 2008 for $111.6 million (about Rs 476 crore). RCB has reported substantial losses since then.
Royal Challenge Sports Pvt Ltd (RCSPL) had passed a resolution at the annual general meeting held in September 2014, where members authorised the board of directors to borrow money not exceeding Rs 500 crore from various banks and financial institutions.
“ …notwithstanding that the money so borrowed together with the money already borrowed by the company (apart from temporary loan obtained from the banker in the ordinary course of business) will exceed the aggregate of the paid up capital of the company…,” the resolution said.
“There was some borrowing by RCSPL but I don’t have details,” a former RCSPL top official told HT on Thursday.
Mallya resigned with effect from February 25, 2016, as chairman and non-executive director of United Spirits Ltd (USL) and as director of RCSPL, as part of a sweetheart deal with UK-based Diageo. RCB was owned by USL.
According to the deal, Mallya’s son Sidhartha Mallya will be the director of RCSPL for a period of two year or till RCB remains a part of the UB group, whichever is earlier.
“I will now be the chief mentor of the Royal Challengers Bangalore. I have been passionate about this team since inception and am determined to do whatever I can to win the IPL trophy. I am glad that my son, Sidhartha, will remain as a director as he is equally passionate about RCB,” Mallya had said in a statement shortly after the deal with Diageo.
Along with RCB, Mallya has also lost control of Force India, owned by Watson Ltd, a UK-based company controlled by the liquor baron. The sponsorship agreement with United Mohun Bagan Football Team Pvt Ltd has also come to an end.
First Published: Mar 11, 2016 08:31 IST