Yesterday there was some good news for Force India boss Vijay Mallya as regulators agreed to allow the planned sale of control of the United Spirits Group to Britain’s Diageo. Mallya will remain as chairman but he will not have any real power. He will however be able to use some of the money raised to try to reduce the depth of the hole he is in with Kingfisher Airlines. The bad news, however, is that the lenders to Kingfisher are now seeking legal advice about whether or not they can exercise guarantees to claim Mallya’s liquor assets. They say that they have personal and corporate guarantees from Mallya and his companies and whether or not they can claim the Kingfisher brand as an asset. We have already seen a financial institution called Srei Infrastructure Finance Ltd sell United Spirits shares, which it acquired as collateral for Kingfisher loans, to Diageo. Srei acquired the shares by buying an $82 million debt from ICICI Bank, although this was no doubt discounted during the transaction. Elsewhere Indian tax officials have filed a criminal complaint against Kingfisher over taxes that were deducted from staff salaries but were never passed on to the government.
Formula 1 usually has one or two characters involved in legal action at one time or another, although at the moment with the exception of Bernie Ecclestone’s activities, it seems that Force India has cornered the market on such activities. Still, the team is looking promising on the race track, which is good news, as long as the money keeps on flowing into the team.