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Sunday, February 28, 2021

Vijay Mallya lashes out at banks for sparing bigger defaulters

SBI had filed three other applications, including one seeking Mallya’s arrest and impounding of his passport, as the bank approached DRT seeking action against him for defaulting on loans.

By: ENS Economic Bureau | Mumbai |
March 7, 2016 1:56:35 am
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Chairman of defunct Kingfisher Airlines Vijay Mallya on Sunday lashed out against banks for not declaring borrowers who have defaulted bigger amounts as willful defaulters and making him a “poster boy” of banks’ non-performing assets (NPAs).

“None of these large borrowers (whose debt is significantly more than the KFA debt) have been declared wilful defaulters, but unfortunately, UB Holdings and I have been declared wilful defaulters by certain banks on technical grounds. I have legally challenged these declarations,” Mallya said in a statement. He said he has made available Rs 2,494 crore to banks and is trying to work out a one-time settlement with banks. The Debt Recovery Tribunal (DRT) will on Monday pass orders on SBI’s application seeking the lenders’ first right on the $75-million payout from Diageo to Mallya under a recent deal.

SBI had filed three other applications, including one seeking Mallya’s arrest and impounding of his passport, as the bank approached DRT seeking action against him for defaulting on loans.

“Despite pledging blue chip securities and depositing significant amounts in court, a successful disinformation campaign has ensured my becoming the poster boy of all bank NPAs,” Mallya said. “I feel that the time has come to clarify my position in order to avoid this relentless attack on my reputation,” he said. Clarifying his position, Mallya said, “Kingfisher was launched on the basis of a viable business plan vetted by SBI Capital Markets and renowned International aviation consultants, but despite every effort, it was an unfortunate commercial failure caused by macro economic factors and then government policies.”

The truth about Kingfisher Airlines and its financial stress due to external factors has been reported by SBI to the RBI in their letter dated January 31, 2012. “After the closure of the airline, since April, 2013, banks and their assignees have recovered, in cash, an aggregate of Rs 1,244 crore from sale of pledged shares. In addition an aggregate of Rs 600 crore is lying deposited in the Karnataka High Court (since July 2013) and a further sum of Rs 650 crore belonging to United Breweries Holdings has been deposited in the Karnataka High Court since early 2014, being sums realised from the sale proceeds received by United Breweries Holdings from the sale of shares in United Spirits to Diageo Plc in July 2013,” he said.

Refuting reports of a fraud, he said, “all the enquiries conducted have failed to find any evidence of misappropriation of funds by Kingfisher Airlines or myself for the simple reason that the allegations and the innuendo to this effect is plainly false.”
“My group directly invested over Rs 4,000 crore in Kingfisher Airlines itself which investment stands fully impaired. It is not as though it is only the bank debt that has suffered. The banks will recover a substantial part of their debt and my group’s loss is permanent,” Mallya said.

On reports about him planning to escape from the country, Mallya said, “I have neither the intention nor any reason to abscond. I have been a non resident for almost 28 years and the RBI has acknowledged this in writing. I am also honoured to be a member of the Rajya Sabha.” Mallya said he has been summoned before various investigative agencies and duly attended and cooperated with each of them. “I will continue to do so. My statement as to my personal future after quitting Diageo/USL — that I want to spend more time in England closer to my children — has been grossly distorted and misportrayed. I wish to reduce my business commitments gradually and devote more time to my family…,” he said.

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