SEBI bars Vijay Mallya from capital markets

Mumbai: The Securities and Exchange Board of India on Wednesday barred liquor tycoon Vijay Mallya and six others from participating in the country's securities market for allegedly diverting funds from whiskey maker United Spirits Ltd (USL).

SEBI said it appeared Mallya and six others erstwhile United Spirits employees had routed funds to other companies in Mallya's United Breweries group, including the now defunct Kingfisher Airlines.

"Neither have I had any communication with SEBI nor have I ever been afforded a hearing before this purported action has been taken," Mallya said in a statement.

"I have always strongly denied all allegations made by USL."

Mallya, the flamboyant owner of a Formula One team and dubbed by media as the "King of the Good Times," was on Tuesday charged with conspiracy and fraud connected to a 9 billion rupee loan granted by a state-run bank.

Mallya moved to Britain last March after being pursued in courts by banks seeking to recover about $1.4 billion the Indian authorities claim is owed by his Kingfisher airline.

The SEBI said in an order posted on its website that the alleged diverting of funds had larger implications on the safety of the securities market.

"It would therefore not be in the interest of the securities market and the interest of investors to allow persons of such doubtful demeanour to continue to act as KMPs [key management personnel] in the company or in other listed companies or allow them to deal in the securities market," the order said.

The regulator has also asked United Spirits to provide, within 21 days, the steps taken to recover 18.81 billion rupees ($276 million) diverted out of the company.