Will not lose anything more in battle with Mallya: Banks
After taking over Kingfisher Villa, Vijay Mallya’s grand house in Goa, a consortium of banks led by State Bank of India (SBI), is now prepared to take all legal recourse to recover every penny from the embattled billionaire.business Updated: May 16, 2016 09:52 IST
After taking over Kingfisher Villa, Vijay Mallya’s grand house in Goa, a consortium of banks led by State Bank of India (SBI), is now prepared to take all legal recourse to recover every penny from the embattled billionaire. Mallya is facing legal proceedings for defaulting on debt now amounting Rs 9,000 crore from various banks to the collapsed Kingfisher Airlines (KFA).
Lenders have already rejected his offer of a reduced payout of Rs 6,868 crore by September.
Bankers are even prepared to face delays in the recovery of dues, after the UK government last week refused to deport Mallya. “We will fight it out in the courts. The apex court (Supreme Court) is hearing the matter, so it will help. Most court cases by banks are against the borrower, which is Kingfisher Airlines and not the promoter Vijay Mallya... We will continue to fight the cases legally till we get our recovery,” a senior public sector bank official said.
The lenders have filed 20 cases in various courts, including the Debt Recovery Tribunal (DRT), since June 2013. There have been more than 500 hearings and 180 adjournments.
Mallya’s passport has been revoked and a non-bailable warrant has been issued against him.
“He (Mallya) has not interacted with us at all after the settlement offer he made. We have made all provisions against the loans. We will not lose anything further,” said one banker who requested anonymity as the case is in court. SBI, Punjab National Bank (PNB) and United Bank of India (UBI) have already declared Mallya ‘willful defaulter’.
Banks have so far recovered about over `1,400 crore by selling shares and collaterals. Another Rs 1,200 crore is locked in escrow accounts at the DRT, Bengaluru. Online auction of the Kingfisher House, the airline’s headquarters, and Kingfisher brands in March and April, respectively, failed to attract bidders.
On May 13, the SBI-led consortium took possession of the property in Goa and is now preparing to auction the house as part of the recovery process. Valued at R90 crore, the Goa villa, is in the name of Mallya’s UB Holdings and was mortgaged to banks as collateral. According to reports, around 50 staff members at the Kingfisher Villa, including gardeners, cooks, drivers and security guards, have been replaced by 44 bouncers by SBICAP Trustee.
An auction of Mallya’s private jet has been scheduled for June 30, which is expected to yield Rs 150 crore.
Experts, however, are not that optimistic.
“The mainline brand Kingfisher belongs to someone else,” said Harish Bijoor, a brand strategy expert. “The price of the brand holds no value now. It can only be a collector’s item for Rs 2 crore or so. Also, it can be used only for an airline business. So only an entity wanting to enter the airline space would buy it. Also, no big company would go by the Kingfisher brand but its own. Banks are holding an empty piece of paper.”
Meanwhile, expanding its money-laundering probefurther, the Enforcement Directorate has asked around half a dozen lenders of KFA to furnish details of financial transactions conducted by the airline’s top executives.