BENGALURU: Diageo Plc on Thursday challenged Debt Recovery Tribunal's power to direct it to deposit USD 40 million, a part of USD 75 million a payout package signed with liquor baron Vijay Mallya who is facing a multi-agency probe including for alleged money laundering.
The company contented before the tribunal that the amount was paid outside India.
"The amount of USD 40 million, which is a part of USD 75 million payout package between Mallya and us, was paid outside India and hence the DRT does not have power to direct us to attach the money before the tribunal. Such a deal does not fall in the jurisdiction of DRT," Diageo argued.
As soon as the proceedings began at the tribunal here, Diageo Counsel submitted the copy of the objections filed against SBI-led Bankers' memo, seeking depositing of USD 40 million before the DRT.
The consortium led by State Bank of India had filed a memo putting a claim on the payout of USD 40 million to Mallya by Diageo as part of the sweetheart deal.
According to the deal, Diageo agreed to pay Mallya USD 75 million in five instalments in lieu of the liquor baron stepping down from the post of Chairman of United Spirits.
An amount of USD 40 million was paid immediately after Mallya quit from chairman's post.
Making submissions before DRT Presiding Officer C R Benakanahalli, Diageo's counsel prayed that the tribunal should reject the bankers' memo for its inconsistent claims on relief.
Diageo also argued that USD 40 million was paid to Mallya on February 25, much before DRT's March 7 order, and hence the attempt of the bankers to recreate liability is questionable and untenable.