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Now, Diageo wants Mallya to return Rs 260 crore

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[vc_row][vc_column][vc_column_text]British liquor giant also wants the embattled ‘King of Good Times’ to compensate for losses, has held back the payment of Rs 45.5 crore (USD 7 million) a year to Mallya

Once the ‘King of Good Times’, Vijay Mallya now appears to be a caricature of his past self. In a self-imposed exile of sorts in the UK, ever since his imminent arrest over ‘wilfully defaulting’ on repayment of Rs 9000 crore in loans to various banking institutions forced him to leave India, Mallya, on Friday, got another major jolt from British liquor giant, Diageo.

Diageo wants the Kingfisher boss to re-pay Rs 260 crore (USD 40 million) that it had paid him as part of a global non-compete agreement which saw him stepping down from his flagship company United Spirits (USL) last year. The deal had included an upfront payment of the amount, with the balance being paid in equal instalments over the next five years, provided Mallya complied with the terms of the agreement such as a five-year global non-compete clause (excluding the United Kingdom) and non-interference, among others.

However, citing violation of the agreement’s terms, Diageo has now asked Mallya to not only return the original sum of Rs 260 crore but also compensate the company for losses while it has also stopped the payment of Rs 45.5 crore ($7 million) that was to be paid to Mallya for a five-year period.

Diageo, which is the world’s largest liquor company, has also made it clear that it will not pay Mallya the remaining instalments due to the breach of several provisions of their deal with him.

In its financial year statement, Diageo noted: “Owing to various reasons, including breaches of several provisions of the 25 February 2016 agreement by Dr Mallya, Diageo believes that it was not liable to pay the $7 million instalment in February 2017 and considers it very unlikely that it will become liable to pay future instalments in subsequent years.”

A report in the Economic Times quoted the Diageo document as stating: “Diageo has demanded from Mallya the repayment of GBP28 million which was paid by Diageo and sought compensation from him for various losses incurred by the relevant members of the Diageo group on account of the breaches committed by him.”

The losses suffered by Diageo reportedly include $135 million that the company had given to Standard Chartered Bank as a conditional guarantee for the liabilities of Watson Ltd, a company affiliated with Mallya. The British liquor company will also claim Mallya’s stake in the Force India Formula One team that had been pledged as security for Watson.

Earlier, Diageo had agreed to pay Mallya after a consortium of 17 Indian banks, led by State Bank of India (SBI), moved the court to recover over Rs 9000 crore in loans that were sanctioned to his now defunct Kingfisher airline.

In July 2016, United Spirits disclosed Rs 1,225.3 crore worth fund diversion and improper transactions with entities associated with Mallya, including Kingfisher Airlines and his Formula One team. USL, which is now controlled by Diageo, said Mallya had diverted these funds to nearly half-a-dozen companies – mostly located in tax havens outside India – in which he had a direct or indirect interest.[/vc_column_text][/vc_column][/vc_row]

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Adani, Torrent compete to purchase Gujarat Titans from CVC Capital

The probable sale of the Gujarat Titans, with the lock-in period coming to a close, will therefore be a defining moment in the changing face of IPL investments.

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The Adani Group and Torrent Group are currently negotiating a deal with private equity firm CVC Capital Partners to offload a controlling stake in the Indian Premier League franchise Gujarat Titans. According to sources, close to the development, reports say CVC Capital Partners will be looking to sell a majority interest while retaining a minority share in the franchise.

This becomes important because it is aligned with the end of the lock-in period by the Board of Control for Cricket in India (BCCI), which restricts any new teams from selling stakes until February 2025. The three-year-old franchise Gujarat Titans is reportedly worth $1 billion to $1.5 billion. CVC Capital Partners had paid ₹5,625 crore for the franchise in 2021.

A source close to the development pointed out that IPL franchises have attracted many investors’ interest since the league has proved an asset with a good reputation for money-making capabilities and cash flows. This growing interest of investors embodies the financial value and stability that come with the IPL franchises.

Gautam Adani, who owns teams in the Women’s Premier League and UAE-based International League T20, is understood to be one of the serious buyers. In 2023, Adani’s group won the Ahmedabad franchise in the WPL with a bid of Rs1,289 crore, the highest offer. His interests in this potential deal signal his commitment to expanding his footprint in the cricketing world.

Arvinder Singh, COO of Gujarat Titans, exuded confidence in the financial future of the franchise. He said the team was confident of turning profitable in the next media rights cycle, referring to even the original ten IPL franchises that took four to five years to turn profitable. He added confidently that the Gujarat Titans would not only turn profitable but significantly enhance in brand value.
 
This surging interest of investors in it is evidence of the growing financial attractiveness of IPL franchises, driven by healthy revenue streams and an increasing global footprint. The probable sale of the Gujarat Titans, with the lock-in period coming to a close, will therefore be a defining moment in the changing face of IPL investments.

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PayTm share price slips 2 per cent over SEBI warning

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Paytm

The share price of PayTm fell by nearly 2 per cent on Tuesday following a warning from the the Securities and Exchange Board of India (SEBI).

PayTm’s parent One 97 Communication had got SEBI’s administrative warning letter on some transactions involving the PayTm Payments Bank during fiscal year 2021-2022. The bourses reacted strongly leading to PayTm shares falling by 1.88% to Rs 460.80 per share on the Bombay Stock Exchange.

SEBI said it had noted the violation with concern and said these matters are being viewed very seriously. The regulator warned the company to exercise caution going forward and improve compliance to rules to prevent similar incidents in the future.

The markets regulator added that failure to comply with rules may force it to invoke enforcement actions as per the law.

In its response to SEBI, PayTm said in a media release that it has always followed listing regulations, as well as any change to these rules over time. The company said it would keep up its commitment to maintain and follow high standards of compliance. Paytm said it intends to provide an adequate response to SEBI on this matter.

PayTm said it has always followed Regulation 23 along with Regulation 4(1)(h) of the SEBI Listing Regulations, without including any change made to these rules over time. Paytm added that the letter from  SEBI has no influence on its finances, operations or other activities in any way.

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Zomato, Swiggy hike platform fee by 6% 

After the hike, the platform fee would be Rs 6 per order from an earlier Rs 5 per order.

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The food delivery majors, Zomato and Swiggy, have recently increased their platform fee by 6 per cent for food orders initially in Delhi and Bengaluru.

The food giant is currently charging in the national capital and IT hub, Bengaluru, the platform fee is distinct from delivery fee, goods and services GST, handling charge and restaurant charges.

After the hike, the platform fee would be Rs 6 per order from an earlier Rs 5 per order. Gradually, the higher platform fee is expected to roll out to other cities as well.

Notably, this fee is applicable universally to all food orders, irrespective of customer enrollment in loyalty programmes offered by both food giants. The charges directly contribute to the companies’ revenue streams and cost management efforts. The platform fee goes to the food aggregators to apparently control costs and increase revenues.

In April, they charged Rs 5 per order, but now it’s been increased by Rs 6 per order. That’s a 20% increase in fees for food delivery. This change in their strategy to adjust the price in a market as they expand their services.

Increase in platform fees, impacting how much customers pay for their food deliveries across the board. When customers order food using the app, they will notice different charges, besides the platform fees. These include delivery fees, handling fees, GST (Goods and Services Tax), and charges from the restaurant.

The charges earned by the platform, directly go to the food delivery app, helping to manage all expenses and boost their wages. The food delivery platform aimed to make between Rs 1.25 to Rs 1.5 crore per day through the fee, the app charges.

In August last year, Zomato introduced platform fees of Rs 2 per order for the first time. In October, they raised their platform fees from Rs 2 to Rs 3 in most and in major cities. Additionally,  Zomato is a quick commerce platform.

According to reports, Zomato stock reached its highest price of Rs 232 on the Bombay Stock Exchange. This achievement has made Zomato founder and CEO, Deepinder Goyal, a billionaire. The company has experienced a strong upward trend over the past years, driven largely by the expansion and success of its quick commerce subsidiary in Blinkit.

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