An SBI-led consortium of lenders on Friday moved the Supreme Court claiming that both Vijay Mallya and the defunct Kingfisher Airlines are jointly and severally liable to pay total outstanding dues of around Rs 5,772.94 crore, and sought a direction to United Breweries (Holdings) and others to deposit the entire money realised from the sale of United Spirits (USL) with the court.
SBI said it was sure that even if all the secured assets of UBL and Kfa were sold and their value realised, they would still not be able to recover a substantial portion of the outstanding dues, around R5,772.94 crore including interest and other charges on May 31, 2013. Thus, the money disbursed pursuant the sale to ILFS, Religare Finvest, Capital First, IFCI, Yes Bank and HDFC should be deposited in the court pending an enquiry into the validity of their pledges, it said.
The Karnataka High Court had on December 20 last year annulled the sale of 6.9% stake (10,141,437 shares) in USL to British group Diageo by guarantor UBHL, the aholding company of Vijay Mallya’s UB Group. The HC had asked Diageo to return the purchased shares to UBHL within two weeks on the ground that the lenders have a claim over guarantor’s assets.
While issuing notice to United Spirits, Diageo and others, a bench headed by Justice AK Patnaik said that the parties residing abroad can be served through courier. Earlier, the court had in February directed the companies to maintain status quo in the sale of USL.
However, it clarified that the winding up proceedings initiated by the financial entities, including one by BNP Paribas, before the HC would continue.
According to the petition, the consortium of banks had examined the Diageo transaction from the sole perspective of whether the proceeds from the same would be utilised for reviving Kfa. However, it said that it had never given any written consent for either pledge or sale of shares by UBHL.
SBI said that the single judge of the HC had passed the order without making them parties and had given permission for sale of valuable moveable properties of UBHL. However, it said that its member bnaks have not relinquished their rights and interests as secured creditors.
The other members of the consortium include Bank of Baroda, Bank of India, Central Bank of India, Corporation Bank, The Federal Bank, IDBI Bank, Indian Overseas Bank, Punjab and Sind Bank, PNB, State Bank of Mysore and UCO Bank.
SBI, which was appointed the lenders’ agent by other creditors to coordinate on their behalf with United Breweries and Mallya, had sanctioned further loans to enable the revival of Kfa, the petition said, adding that Mallya in turn had provided guarantees in favour of SBI and Corporation Bank for loans sanctioned to Kfa by each member of the consortium.
As Kfa defaulted continued…