The market regulator Securities and Exchange Board of India (SEBI) has written to billionaire Vijay Mallya's United Spirits Ltd "with a set of queries" after it recently announced it was in talks to sell a stake to Diageo Plc, a United spokesman said on Thursday, declining to specify the nature of the inquiry.
The queries from SEBI come after shares in United Spirits surged 23% in the four days leading up the September 25 announcement, jumping an additional 10% the day when the spirits maker disclosed the talks.
SEBI was investigating stock price movements at UB Group companies to check whether securities laws had been broken, a newspaper report said on Thursday citing an unnamed senior regulatory official. UB Group controls India's dominant spirits maker as well as debt-laden Kingfisher Airlines .
"We look at a lot of companies based on market movement and seek management's comments, but there is no formal probe yet (on UB)," a source at SEBI told Reuters.
United Spirits shares have been volatile through the year due to widespread speculation about the company's on-again, off-again courtship with Diageo. The volatility has come as Mallya has scrambled to raise funds for his ailing Kingfisher Airlines.
"We have provided the information," said Prakash Mirpuri, a spokesman with Mallya's UB Group, referring to the requests from SEBI. Mirpuri declined to say if the investigations are linked to United Spirits' share price movement.
{{/usCountry}}"We have provided the information," said Prakash Mirpuri, a spokesman with Mallya's UB Group, referring to the requests from SEBI. Mirpuri declined to say if the investigations are linked to United Spirits' share price movement.
{{/usCountry}}"The movement in share prices of our group companies has been largely influenced by the wide speculation by the media, with no comments from us," he said.