Agencies vet Vijay Mallya emails for proof of ‘undue favours’

These emails, which Mallya sent to senior company officials, political leaders and bankers, may form a part of the CBI’s chargesheet — which is expected in the next few months.

Written by Khushboo Narayan | Mumbai | Updated: January 30, 2017 11:44 am
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Investigative agencies are trawling through 1.5 lakh emails of Vijay Mallya, chairman of the now defunct Kingfisher Airlines, to gather possible evidence of any “undue favours” that may have been given to his firm, said two people familiar with the investigation.

These emails, which Mallya sent to senior company officials, political leaders and bankers, may form a part of the CBI’s chargesheet — which is expected in the next few months — on the Rs 6,900 crore loan default by Kingfisher Airlines. Most of the loans were granted to Kingfisher Airlines between 2006 and 2009, when Vijay Mallya was a Member of Parliament.

Read | VIjay Mallya-bank CMD holiday meeting led to hasty sanction of Rs 350 crore loan: ED

WATCH VIDEO | Liquor Baron Vijay Mallya’s Emails Under Scanner: Here’s Why

It was in November 2010 that banks restructured Kingfisher Airlines’s debt for the first time. The consortium of lenders led by State Bank of India (SBI) converted Rs 1,355 crore of debt into equity at a 61.6% premium to the market price of the Kingfisher Airlines stock.

Read | CBI says Vijay Mallya’s Kingfisher Airlines gave ‘misleading info’ to bank

Besides, the bankers stretched the period of repayment of loans to nine years with a two-year moratorium, cut interest rates and sanctioned a fresh loan.

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The CBI, in its current chargesheet on the Rs 900 crore IDBI loan to Kingfisher Airlines, has highlighted the “undue favours “ given to Mallya while granting loans despite the poor financial health of the company. The CBI has claimed that in 2009-10, the bank approved one of Kingfisher Airlines’s loan requests within a day of receiving the proposal.

In August 2016 and earlier, both the CBI and the Serious Fraud Investigation Office had summoned all the former chairman and managing directors (CMDs) of the 14 public sector banks that had lent to Kingfisher Airlines to ascertain the rationale behind extending loans to the airlines even when it was performing poorly and on the due diligence done by the banks before lending.

In a series of tweet on January 27, Mallya, who is in the UK, however, said all he sought was help related to policy change; not loans. “I begged for help. Not for loans but policy changes — declared goods status for fuel, flat rate of state sales tax instead of ad Valorem, FDI etc,” said Mallya in a tweet. “Was interrogated by CBI and submitted documentary evidence. Not one Rupee was misused. On the contrary we invested over 4500 Crs into KFA,” he said in another.

“For 30 years I built the worlds largest Spirits Company n India’s largest Brewing Company. Also launched the finest airline. This is what I get. I am kind of getting used to these witch hunts coming from all directions with no legal basis whatsoever. Shows what Govt Machinery can do,” Mallya tweeted.

So far, the CBI has arrested four senior IDBI Bank officials, including its former chairman Yogesh Agarwal, for granting loans to Kingfisher Airlines “dishonestly”.

In its chargesheet, the agency has alleged that IDBI officials “abused their official positions as public servants and relaxed the vital pre-disbursement and security creation conditions” to “dishonestly facilitate disbursement” of loans to Kingfisher Airlines in 2009.

In November 2009, the CBI notes, the Risk Rating Committee of the bank disregarded the concerns raised by its own Risk Department and upgraded Kingfisher Airlines from a credit rating of ‘B’ to ‘BB’ without any “detailed reasoning or rationale” while granting a loan of Rs 750 crore. The CBI alleges that this was done by the accused bank officials in collusion with Mallya and Kingfisher officials in order to ensure that its loan proposal would become eligible for bank finance. The CBI has also claimed that IDBI Bank officials facilitated the loan at various stages, including eventually disbursing the entire loan “without compliance of vital terms and conditions of sanction and without creation of securities”.

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  1. S
    Soundar
    Jan 30, 2017 at 2:30 am
    What type of government Mody is running? Mallaiya cheated and looted banks money and scot free till day. The corporate houses huge donations to BJP and Congress should be investigated.
    Reply
    1. V
      Viswanath
      Jan 30, 2017 at 3:19 am
      The speed with which the investigation is going on is pathetic.By the time the agencies gather proof against this guy he will die and with that will end all the case. When are we going to improve on this?
      Reply
      1. J
        Jai hind
        Jan 30, 2017 at 4:23 am
        Behave dude ... It's bank who approve loans. ... They dnt need any sanction from government for that . Coz bank management has that power ..so dnt blame the Gov ..scond thing is ... U must notice that the drfaultatiom was traced by congis itself and started enquiry by them .... So don't u Fe it's hwo needed the education
        Reply
        1. J
          Jai hind
          Jan 30, 2017 at 4:25 am
          Please read my msg above ...and investigation was started by congis itself ...he was in India undergoing investigation until modi let him abscond
          Reply
          1. G
            gopal
            Jan 30, 2017 at 3:26 am
            Looks like IE and its reporters have eaten out of the hands of Mallya. They have reduced the loan amount from Rs 9000 Crore to Rs 6900 crore..keep going IE.lt;br/gt;lt;br/gt;"“For 30 years I built the worlds largest Spirits Company n India’s largest Brewing Company"..Mallya u did not build the largest spirits company, a section of Indian potion with their mindless and senseless consumption of what you produce have helped in building the largest spirits company.lt;br/gt;lt;br/gt;Technically India has low per capita consumption. But considering the potion that consumes Alchol, the percapita among the alcohol consuming Indians is much higher than the western world.
            Reply
            1. H
              HR
              Jan 30, 2017 at 6:02 am
              Demonetisation hoax: Bhartiya Danga Party's union Danga financier and ugly bald voodoo economist Arun Jetlay came out of hiding today and want to tell benefits of note ban hoax, yes Ofcourse but with a small caveat though, with a gun on people's head, after taking all their money and disposing of his own money. That's how he roll, so gangsta. PM Modi then wants to jump to a podium and do name calling and mudslinging. Yes Ofcourse but with a small caveat though, he want to do this with his signature bizzare hand gestures. Biggest name calla and biggest mud slinga. He then wants to seize all black money, yes Ofcourse with a small caveat though, he wants to do this by short cut of demonetisation. Biggest hoax pulla. PM Modi then wants to pour cow mutra down people's throat and apply cow gober on people's face for best shade results. He then wants people to buy patanjali product only using digital transaction, yes Ofcourse with a small caveat though, with a gun on people's head...
              Reply
              1. M
                Mohan
                Jan 30, 2017 at 4:34 pm
                escaped from a mental asylum !
                Reply
                1. M
                  Mohan
                  Jan 30, 2017 at 9:13 am
                  The CBI and the ED instead of leaking selective emails to please their masters should expedite the case and bring it to a conviction. Mere selective leaks would not help. The newspapers too instead of blindly reporting what is handed out should investigate and ask searching questions so the culprits are brought to book.
                  Reply
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