Income Tax deptt warns against buying Vijay Mallya company stocks

Income Tax deptt warns against buying Vijay Mallya company stocks
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Bengaluru, Oct 26: Two finance ministry agencies have issued conflicting notifications on recovering money from fugitive tycoon Vijay Mallya through sale of shares in his company, with the income tax department even going on to warn people against buying the stocks.
On September 29, the Debts Recovery Tribunal-II (DRT) in Bengaluru notified an e-auction of 41.52 lakh (41,52,272) shares held by Mallya in United Racing and Bloodstock Breeders Ltd (URBBL). However, the income tax (I-T) department on Thursday warned the public against buying these shares, saying: “…persons purchasing such shares will be doing so at their own risk.” The department has also said that sale of these shares are void. The auction is scheduled on October 30.
As per the DRT notification, a certificate for recovering Rs 6,203 crore and costs, along with an interest at 11.50% per annum from June 2013, was ordered on February 21, 2017 in the case pertaining to ‘SBI and Others versus Kingfisher Airlines Ltd and Others’. The sale of the URBBL shares was part of this recovery process.
“The sale will be of the shares in one single lot with a reserve price of Rs 24.52 crore,” the notification read. This means that each of the 41.52 lakh shares will be sold at Rs 59.07 and the DRT has said that in case the e-auction failed, a manual auction will be held on October 31. The I-T department, however, has said: “The income tax department has already created charge against the said shares on account of outstanding demand. Therefore, such sale or transfer of these shares will be void.”