Sebi’s plan to sell select assets of Mallya falls flat

TIL Desk/Business/New Delhi/ The Securities and Exchange Board of India’s (Sebi’s) plan to recover pending dues from the Vijay Mallya-owned United Breweries Holdings (UBHL) by liquidating its securities market investments may not go as planned. The assets that the capital market regulator is eyeing are already under possession of the Enforcement Directorate (ED), another government agency.

Earlier this month, Sebi had issued an order to attach all the bank accounts, shares and mutual fund units held by UBHL to recover Rs 18.5 lakh that the liquor company had defaulted on the payment of a penalty imposed by the regulator in 2015.The assets mentioned in the Sebi order are already in possession of the ED for violation of an anti-money laundering law by Mallya, sources said.

What further complicates matters for Sebi is provisions of the Prevention of Money Laundering Act (PMLA) override any other law, providing ED first right over the assets. Citing the provision of PMLA, an ED official said, “The law has the provision under section 71, which says once action is taken under PMLA then no other Act will have effect on the said property.”

According to him, these shares cannot be sold by any other authority, including Sebi. The shares attached by the ED were being held by Mallya in UBHL, UB and various other group companies controlled directly or indirectly. At the time of attachment in December 2016, total value of these shares was pegged at Rs 1,680 crore.