Indian liquor baron quits United Spirits after financial allegations

Liquor baron Vijay Mallya has stepped down as the chairman of United Spirits, the Indian arm of Britain's Diageo, following allegations of financial lapses at the company founded by his family.

Mallya, 60, announced his immediate resignation from the post after reaching a payout agreement with the UK-based global spirits giant, which was trying to oust him after an internal inquiry found financial irregularity at the Bangalore-based arm.

"The time has now come for me to move on and end all the publicised allegations and uncertainties about my relationship with Diageo and USL," Mallya said in a statement on Thursday, according to India's Press Trust of India news agency.

"I am pleased to have been able to agree terms with Diageo and USL. The agreement we have reached secures my family legacy," he said.

He will receive a US$75 million payout as part of the deal, and founder-emeritus title -- a non-decision-making role -- in the company.

The flamboyant businessman sold a large chunk of USL, which he had inherited from his father, to Diageo in April 2014.

The tycoon -- who at his height was referred to as "India's Richard Branson" -- owes over $1 billion to a consortium of state-run banks and creditors after his Kingfisher Airlines was grounded in 2012.

Known for his lavish lifestyle, he has a stake in the Force India F1 team and owned the Indian Premier League (IPL) cricket team Royal Challengers Bangalore, where he will hold the honorary title of chief mentor after the new agreement.

Forbes pegged his fortune at US $ 750 million in 2014, down from US $1.6 billion in 2007.