Liquor baron Vijay Mallya has decided to sell the controversial Boeing aircraft owned by his US-based, Nasdaq-listed IT solutions company UBICS to United Breweries Holdings.

The move is meant to ensure that UBICS remains listed on the Nasdaq small cap market, after the exchange threatened to delist the company on audit issues.

Officials close to the development said the Boeing 727 is to be sold for $4 million. However, a UB group spokesperson declined to comment on the issue.

UBICS's purchase of the aircraft had placed the company in a difficult situation. Auditors BDO Seidman LLP resigned in November 2002 after expressing concern as to how the purchase of an aircraft and the subsequent lease to a group company might be interpreted under the provisions of the Sarbannes-Oxley Act, 2002, which deals with corporate governance.

Owing to the delay in the re-appointment of auditors, the company had filed its interim financial results without a proper audit review. As a result, Nasdaq had notified UBICS that its common stock would be delisted from the Nasdaq Small Caps Market.

However, after hearing the company's appeal, the Nasdaq listing qualifications panel decided to continue with its listing, but said it must demonstrate a market value of publicly-held shares of at least $1 million on or before March 24.

In addition, UBICS has to demonstrate a closing bid price of at least $1 per share on or before April 7.

To this end, UBICS has authorised a 1:5 reverse stock split to raise the minimum bid price of the common stock above $1 per share. However, should UBICS cease to be listed on the Nasdaq small cap market, it will be allowed to continue on the OTC Bulletin Board.

UBICS, through its subsidiary UBICS Holding Company, had acquired the Boeing from Davis Oil Company for $3,350,000, and incurred an additional expenditure of $650,000 on renovation. The aircraft has been dry-leased to United Breweries Holdings for a monthly rental of $50,000 since December 2002.