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The shareholders of Mcdowell Holdings Limited (MHL) and its creditors are ready to fight over shares of United Breweries Limited (UBL) which the company is holding.
McDowell Holdings Limited was incorporated on March 1, 2004. Vijay Mallya is the promoter and chairman of the board of directors of the company. The company was incorporated to establish and carry on the business of liquors, beverages, alcohols, wines, and other products. The company's activity is that of an investment holding company. It has investments primarily in the UB Group companies, which are engaged in the business of exports and property development, manufacture and sale of beer, chemicals, fertilizers, etc.
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The company has seen its fair share of trouble as it had major debt. The company had pledged some shares of UBL with Yes Bank which were invoked by the bank in September 2016. The shares were worth Rs 156 crores at the time.
Moreover, the Debt Recovery Tribunal sold a substantial number of shares of the company as the company had no promoter at the time. The NSE suspended trading of the shares for a month in February 2022 due to an insufficient number of Directors.
The shareholders of the company had tried to save the company from liquidation in March 2022 as one of the company's creditors, Sunstar Hotels & Estates, had filed a plea with the NCLT to recover a debt of Rs 16.8 crores.
The shareholders alleged that debt of such an insignificant amount could be easily repaid if a professional Board were in place. They also alleged that this was a move to snatch control of the company from shareholders, stating that a team of people led by Vijay Mallya was trying to siphon out the company's investments.
The shareholders wanted the company to sell out the holdings of UBL to repay the creditor and pay the balance to the shareholders. Ultimately, insolvency proceedings were initiated against the company in April 2022 following a plea filed by Sunstar.
The promoter hasn't been out of trouble either. Vijay Mallya had stepped down from the Board of MHL in 2013 and no reasons were provided for the same. After he fled to the UK in 2016, he has been awaiting deportation to India on account of financial crimes. In 2021, his creditors wanted to sell his shareholding in three companies to recover around £600 million. Currently, he is pursuing appeals in the UK to overturn a bankruptcy order passed against him.
The earliest share record of McDowell holdings is dated in May 2007 when it was listed at a price of Rs 234.75 per share. Its last traded date was 27th June 2022, when it closed at a price of Rs 54.80 per share, declining 72% in less than 8 months.
Article by Aman Agarwal.
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