₹1 billion diverted from RCB’s holding company: Report

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Believe it or not! When Vijay Mallya was at the helm, ₹1 billion had been diverted from the account of the Royal Challengers Bangalore IPL franchisee’s holding company – Royal Challengers Sports Pvt Ltd. (RCSPL).

According to a Business Standard report, the transaction is revealed during an internal probe by the United Spirits Limited (USL), the Royal Challengers Sports Pvt Ltd parent company.

RCSPL, in its 2016-17 financial statement filed before the financial regulators, has alleged that a whopping ₹115 crores ($1.15 billion) had been “potentially diverted from Royal Challengers Sports Private Limited”. The additional inquiry that found the financial fraud was concluded in July 2016 after almost two years of an investigation headed by USL’s managing director and chief executive officer (CEO).

USL was owned by Vijay Mallya until the British beverage company Diageo acquired it in 2014. The new owner has been conducting investigations into financial irregularities at USL before its acquisition. The alleged financial irregularities at the RCB holding company pertain to transactions conducted between October 2010 and July 2014, a period when Mallya’s companies had the ownership of RCSPL.

The initial inquiry, launched by the British owners in September 2014, looked into transactions conducted between 2010 and 2013 and found that USL funds were diverted to Kingfisher Airlines and some of the other companies related to Mallya’s United Breweries Group.

An additional inquiry concluded in July 2016, found that almost ₹1,200 crore had been diverted from USL to overseas and Indian entities that appear to be affiliated or associated with USL’s former non-executive chairman, Vijay Mallya. The same additional inquiry also found that ₹1,200 crores had been diverted from RCSPL.