SBI says will examine Rs 4,000-cr settlement offer by Vijay Mallya

  • HT Correspondent, Hindustan Times, Bengaluru
  • Updated: Mar 30, 2016 18:07 IST
Offer refused: Vijay Mallya addressing an expo as chairman of Kingfisher Airlines in 2007 (HT file photo)

A consortium of 17 banks led by the State Bank of India said on Wednesday it would examine a Rs 4,000-crore settlement offer made by Vijay Mallya’s lawyer in the Supreme Court.

The embattled tycoon has proposed to repay the amount towards the dues of the defunct Kingfisher Airlines. The banks are claiming Rs 9,000 crore in principal, interest and penalties.

The Supreme Court has told the banks to reply within a week to Mallya’s proposal. It will hear the case next on April 7.

Read: Mallya ready to pay banks Rs 4,000 cr by Sep: Lawyers to SC

A Financial Express report earlier said the banks had turned down a Rs 2000-crore settlement offer from Mallya. 

According to the Financial Express newspaper, the 17 banks, who are claiming over Rs 9,000 crore according to documents submitted in the Supreme Court, turned down the offer that is barely a fourth of the total dues. 

An unnamed banking executive was quoted in the report saying, “We cannot accept such a small amount and have rejected the proposal.”

The consortium is led by State Bank of India, which had earlier along with Punjab National Bank and Union Bank of India, declared Mallya a ‘wilful defaulter’ -- a term that according to Reserve Bank of India definition includes diversion of funds for uses that they were not meant for.

Mallya who is currently outside India is expected to appear before the Enforcement Directorate on April 2.  He was originally expected to appear before the investigation agency on March 18 but was later provided additional time on his request.  Mallya left India on March 2, that has raised serious doubts about the lenders to recover their dues.  Through his Twitter posts and media statements, Mallya has clarified that he has no intention to abscond but he neither wishes to face a trail by media. On March 11, he wrote on Twitter: “As an Indian MP (Member of Parliament) I fully respect and will comply with the law of the land. Our judicial system is sound and respected. But no trial by media.”

Earlier this month, attempts to auction Kingfisher House, that used to be the headquarter of the now defunct Kingfisher Airlines did not attract any bidders at a reserve price of Rs 150 crore, which is perceived as much below market value.

With HTC inputs from New Delhi

 Read: Kingfisher trademarks to be auctioned

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