3 min readNew DelhiMar 16, 2016 05:16 PM IST
First published on: Mar 16, 2016 at 05:16 PM IST
Kingfisher chairman Vijay Mallya
Under fire from multiple agencies,Vijay Mallya’s Kingfisher Airlines now faces a probe by the Serious Fraud Investigation Office (SFIO) into its allegedly ‘inflated’ brand valuation of over Rs 4,000 crore.
The government’s white-collar fraud detection agency is probing whether such a high valuation was arrived at fraudulently to get more funds from banks and siphon off the additional money for purposes other than proposed investment in the airline.
Burdened under huge losses and liabilities, including to the lenders, the airline finally had to be grounded in late 2012. While lenders have stepped up their efforts to recover dues totalling over Rs 9,000 crore, the founder and main promoter Mallya left the country earlier this month.
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While SFIO was already probing Kingfisher for “financial irregularities and fund diversion”, the agency has now also begun looking into the high valuation secured by the airline as part of its overall investigation, sources said.
In this regard, SFIO is also looking into the role of Grant Thornton LLP which had valued the brand.
When contacted, Grant Thornton India LLP said it stands by the brand valuation report of Kingfisher Airlines and was ready to provide all required information to appropriate authorities.
“We fully stand by our brand valuation report which we believe was appropriate in the context of when it was done and the purpose for which it was done. Grant Thornton will obviously be pleased to offer all the information we have in connection with the matter to the appropriate authorities, and support any investigations,” it said in a statement.
Besides SFIO, the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) are also probing issues related to massive loan default by Mallya and others.
Markets regulator Sebi is also looking into alleged cases of insider trading and violations to listing regulations and corporate governance norms, among other lapses.
Recently, the ED registered a money laundering case against Mallya and others based on a CBI FIR registered last year. The agency is also investigating the overall financial structure of Kingfisher Airlines and will look into any payment of kickbacks.
The CBI had booked Mallya, Director of Kingfisher Airlines, the company, former CFO A Raghunathan and unknown officials of IDBI Bank in its FIR alleging that the loan was sanctioned in violation of norms regarding credit limits.
Kingfisher chairman Vijay Mallya
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