Diageo, which has bought controlling stake in United Spirits from UB Group, asked Mallya to step down following "various improprieties and legal violations" were found after a probe it conducted into loans given by USL to various UB Group companies.
However, Mallya refused to resign and said the inferences and allegations are unjustified and false.
USL, the erstwhile flagship firm of Mallya-led UB Group, has already seen a number of exits from its board and top management since the probe was launched by UK-based Diageo.
"At its meeting held on April 25, the Board discussed and considered in detail the report submitted by the MD and CEO in relation to the inquiry...
"The inquiry revealed that between 2010 and 2013, funds involved in many of these transactions were diverted from the company and/or its subsidiaries to certain UB Group companies, including in particular, Kingfisher Airlines Ltd," USL Board said in its inquiry report.
It further said: "The inquiry prima facie revealed that between 2010 and July 2013, certain transactions entered into 0on behalf of the company appear to have been undertaken to show a lower exposure of the Company (and its subsidiaries) to United Breweries Holdings (UBHL) than that which actually existed at the relevant time, that is prior to July 2013."
"All of the dues owing to the Company and its subsidiaries from UBHL aggregating Rs 1,337 crores on July 3, 2013, were consolidated into a single loan agreement dated 3 July 2013 entered into between the Company and UBHL," it added.
The inquiry also suggests that the manner in which certain transactions were conducted, prima facie, indicates various improprieties and legal violations.

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