Board of United Spirits has asked its chairman Vijay Mallya to resign in the light of investigation related to suspected irregularities in the company.

Mallya-led UB Group sold controlling stake in United Spirits (USL) to UK-based Diageo. An independent investigation uncovered that Mallya had swindled funds in the past to various UB Group firms including Kingfisher.

Mallya denies all the allegations leveled against him.

USL threatened that its board would go to shareholders if Mallya does not step down, reported First Post. USL may also inform market regulator Sebi about the findings of a PricewaterhouseCoopers (PwC) probe into the firm’s books.

Meanwhile, Mallya has hired several top lawyers for a boardroom battle.

The Economic Times reported that USL may also submit three reports to its parent firm Diageo, urging the latter to relook into contractual obligations and vote against Mallya in the next EGM.

Diageo holds a controlling stake of about 55% in USL, which was acquired for about $3bn. Mallya owns a small stake of 0.01% while a few of his firms under UB Group hold stakes totalling about 3%.