Heineken International is seeking an approval from United Breweries Ltd’s (UBL) shareholders to change the company’s Articles of Association (AoA) to enable it to nominate a Chairman, according to the company’s notice of annual general meeting. The move will help the company oust Vijay Mallya, who is currently its Chairman for life and retains sole authority to appoint a successor.
Heineken had recently raised its stake in UBL from 46.5 per cent to 61.5 per cent, acquiring Mallya’s shares in the company, making it a majority shareholder.
The company will approach shareholders at the UBL annual general meeting on July 29, after discussing it with financial institutions to ensure maximum support. It may not go through with the plan if Mallya steps down himself and changes the existing condition in the company’s shareholder agreement, in a report where a source told to The Economic Times.
Mallya and his erstwhile partner Scottish and Newscastle had signed this original agreement, which is yet to be changed. Heineken had acquired the latter in 2008, bagging its initial 37.5 per cent stake in the company.
Economic offender and fugitive Mallya is fighting extradition attempts from India and has sought more time to decide his successor at UBL. He had stepped down from the company board in 2017 when the Securities and Exchange Board of India (Sebi) suspended him from the post of director of a listed company, soon after he was declared a wilful defaulter.
The Enforcement Directorate had attached 4.13 crore UBL shares held by eight promoter firms, which translated to a 15.63 per cent stake.
UBL board officials told the publication on condition of anonymity that the company’s functions have not been impacted by this but shareholders have been kept informed due to “good corporate governance”.