Ritu Mallya, step mother of Vijay Mallya, has joined the board of Mangalore Chemicals and Fertilisers. Mallya had to quit the board of MCF on Monday after banks advised the company that it will be difficult for them to lend money to MCF with a “willful defaulter” Mallya on the board.
Ritu Mallya, 68, is a Banglore-based lawyer and was married to late Vittal Mallya, founder of UB group.
Ritu Mallya is a Bengaluru-based lawyer and was married to late Vittal Mallya, founder of the UB group who died in 1983.
Ritu Mallya’s old name was Kailash Advani and ran a garments business at the time of her marriage to Vittal Mallya.
“The Board of directors is authorized to appoint a director as per the articles of association. Ritu Mallya has also given her consent for her appointment as director. She will continue to be director until the next annual general meeting of the company, where the shareholders’ approval will be sought,” an MCF official said.
The company is facing a pitched takeover battle between Pune-based Deepak Fertiliser and Kolkata-based Adventz group.
Mallya’s resignation came after the State Bank of India has sent a communication to all the companies where UB group chairman Vijay Mallya is a director that it will be difficult for the banks to lend fresh funds to the companies with the presence of a “willful defaulter” on the board.
This means Mallya, who is on the board of United Breweries and UBHL, will have to resign in the near future from companies where he is a director and want to access bank funds.
Confirming missive to various companies where Mallya is on board, a top State Bank of India official said this is not isolated action and is a part of activity by lenders after Kingfisher defaulted on payments on dues worth Rs 7,000 crore or Rs 70 billion.
Banks have been active in using legal forums for over year and this step to sounding caution to companies where Mallya is on board has been initiated in last few months.
Lenders will take adverse view of Mallya’s presence on any board, the SBI official told this paper.
