It all ended in good spirit. Vijay Mallya has stepped down as the non-executive chairman of the now Diageo-controlled United Spirits (USL). Diageo and Mallya have been sparring for some time over his exit. He will now have the honorary title of Founder Emeritus, USL. 

The UK firm has agreed to drop all charges of irregularities of Mallya, and will pay him $75 million over five years in return for getting him to go. “The financial terms of today’s agreement with Mallya provide for a payment of $75 million (approximately £53 million) to Mallya over a five year period. This payment will be charged to exceptional items in the year ending 30 June 2016,” Diageo said.

The company has also announced the appointment of M K Sharma as its new chairman with effect from February 25, 2016.

The fight over Mallya’s chairmanship in the company has been going on since Diageo completed the purchase of a majority stake (54.7%) in United Spirits in July 2014. The company has been asking Mallya to step down but he has been refusing to do so.

Mallya said in a statement announcing his departure from the company, “The time has now come for me to move on and end all the publicised allegations and uncertainties about my relationship with Diageo and United Spirits Ltd. Accordingly, I am resigning from my position with immediate effect.”

The development follows three state-owned banks — Punjab National Bank, United Bank and SBI — declaring him, his group holding company United Breweries Holdings Ltd and the long-defunct Kingfisher Airlines as wilful defaulters. A bank consortium led by SBI has decided to auction Kingfisher House in Mumbai on March 17 this year to recover a part of the Rs 6,963 crore dues from Kingfisher.

Anand Kripalu, managing director and chief executive officer of United Spirits, said the agreement reached was important to the company and all its shareholders. “It will allow the Company to prosper and build on the great platform that we have already created in this exciting market,” he said.