BENGALURU: It was a difficult day for liquor baron Vijay Mallya on Monday as the erstwhile ‘king of good times’ was given a double blow in the form of stepping down from the board of one of his companies and face rejection for re-appointment as Managing Director of grounded carrier Kingfisher Airlines (KfA).
Mangalore Chemicals and Fertilizers Limited informed the Bombay Stock Exchange (BSE) that Mallya had stepped down from the board without assigning any reason. Later in the day, Mallya’s other failed company, KfA informed the stock exchanges that the government had rejected the re-appointment of Mallya as MD of the company.
The news comes amidst growing calls asking Mallya to step down from key corporate posts after increasing shareholder activism.
“Vijay Mallya, a Director on the Board of Directors of the Company, has resigned with immediate effect,” MCFL said in a filing to the Bombay Stock Exchange on Monday.
KfA, in its filing said, “Kingfisher Airlines Ltd has informed BSE that the Ministry of Corporate Affairs has rejected the application made by the Company under Section 269 of the Companies Act, 1956 for approval of the Central Government for re-appointment of Vijay Mallya as Managing Director of the Company for a period of 5 years from October 16, 2013 without remuneration.”
Mallya’s airline has been grounded since October 20 2012 on the direction of aviation regulator Directorate General of Civil Aviation (DGCA) after mass cancellations. The airline’s Schedule Operators Permit (SOP) also expired in December 31 2012 and the two-year period to renew the same comes up within a month (December 31, 2014).
KfA has also faced action by stock exchanges for non compliance. Shares of MCFL had gone up almost 15% but closed 9.38% higher at `89.25 on the BSE. The resignation comes at a time when there is a takeover battle involving cement makers, Zuari and Deepak Fertilizers for MCFL.
Interestingly, the shareholders also rejected 9 out of 12 proposals made at another Mallya-led company (United Spirits Limited) at the recently concluded Extraordinary General Meeting (EGM).