Won’t abscond from India, negotiating deal with banks: Vijay Mallya | business | Hindustan Times
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Won’t abscond from India, negotiating deal with banks: Vijay Mallya

Finally breaking his silence, Vijay Mallya, chairman, United Breweries Holdings Ltd (UBHL), said in a media statement on Sunday that he had no intention of absconding from the country, and that he has been trying to reach a one-time settlement with the consortium of 17 banks to which Kingfisher Airlines owes over Rs 7,000 crore.

business Updated: Mar 06, 2016 23:33 IST
HT Correspondent
Rajya Sabha MP and Chairman of the UB Group Vijay Mallya during the Parliament winter session at Parliament House in New Delhi.
Rajya Sabha MP and Chairman of the UB Group Vijay Mallya during the Parliament winter session at Parliament House in New Delhi.(HT Photo)

Finally breaking his silence, Vijay Mallya, chairman, United Breweries Holdings Ltd (UBHL), said in a media statement on Sunday that he had no intention of absconding from the country, and that he has been trying to reach a one-time settlement with the consortium of 17 banks to which Kingfisher Airlines owes over Rs 7,000 crore.

This is the first official statement from Mallya since February 25, when he announced a $75-million (Rs 515 crore) settlement with UK-based Diageo Plc to exit United Spirits. Diageo has a controlling interest in the Indian liquor giant.

“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,” he said in the statement. “I wish to reduce my business commitments gradually and devote more time to my family, and that my resignation from United Spirits was a step in this direction.”

Read: Vijay Mallya finds 75 million reasons to resign as USL chairman

“I have been a non-resident (NRI) for almost 28 years and the Reserve Bank of India has acknowledged this in writing. Over the years, I have built successful businesses in India and abroad. I am also honoured to be a member of the Rajya Sabha,” the statement said.

Read: Vijay Mallya’s only regret: Kingfisher not flying when oil is cheap

Mallya claimed that a successful disinformation campaign has ensured “my becoming the poster boy of all bank NPAs” (non performing assets) despite pledging blue chip securities and depositing significant amounts in court.

“A consortium of banks loaned funds to Kingfisher Airlines, a public company, but these loans were secured by blue chip securities,” the statement said. “After the closure of the Airline, since April, 2013, the 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. Thus, the aggregate cash recovery/security available is Rs 2,494 crore.”

“In fact, Banks have NPAs of Rs 11 lakh crore and have borrowers who owe much more than the amount allegedly owed by Kingfisher Airlines to the Banks – a fact never alluded to or widely reported by the media as in my case,” he claimed.

He also pointed out that while he and UBHL have ben declared willful defaulters, these large borrowers have got away. “I have legally challenged these declarations,” he said.

Vijay Mallya’s press statement in full:

“The past few days have witnessed a near hysterical campaign in the media directed against me.

Recognising that the media was indulging in sensationalism, I thought it was best to let the drama play out – never spoil a sensational story with the truth.

However I feel that the time has come to clarify my position in order to avoid this relentless attack on my reputation.

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 State Bank of India to the Reserve Bank of India in their letter dated 31st January 2012.

Read: SBI wants Vijay Mallya arrested, passport impounded

A consortium of Banks loaned funds to Kingfisher Airlines, a public Company, but these loans were secured by blue chip securities.

After the closure of the Airline, since April, 2013, the Banks and their assignees have recovered, in cash, an aggregate of Rs. 1,244 crores from sale of pledged shares. In addition an aggregate of Rs. 600 crores is lying deposited in the Karnataka High Court [since July, 2013] and a further sum of Rs. 650 crores belonging to United Breweries Holdings has been deposited in the Karnataka High Court since early 2014, being sums realized from the sale proceeds received by United Breweries Holdings from the sale of shares in United Spirits to Diageo Plc in July, 2013.

Thus, the aggregate cash recovery/security available is Rs 2,494 crores.

Legal proceedings apart, I have been making efforts to reach a one-time settlement with the Banks, and to that end I have had three meetings and follow up calls in the recent past and my efforts will continue – this settlement would be based on additional payments to the Banks.

Personally I am not a borrower or a judgement defaulter.

Read: Islands, castles, stud farm, vintage cars: How rich is Vijay Mallya?

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 NPA’s.

In fact, Banks have NPA’s of Rs. 11 lakh crores and have borrowers who owe much more than the amount allegedly owed by Kingfisher Airlines to the Banks – a fact never alluded to or widely reported by the media as in my case.

None of these large borrowers [whose debt is significantly more than the KFA debt] have been declared wilful defaulters, but unfortunately, United Breweries Holdings and I have been declared wilful defaulters by certain Banks on technical grounds. I have legally challenged these declarations.

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 4000 crores into 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 – my groups loss is permanent.

Absent any fraud, the concept of corporate limited liability cannot be ignored.

Vijay Mallya has been one of India’s most controversial businessmen, with several papers accusing him of giving big businesses a bad name in the subcontinent. (HT Photo)

I have been most pained as being painted as an absconder – I have neither the intention nor any reason to abscond. I have been a non resident for almost 28 years and the Reserve Bank of India has acknowledged this in writing.

Over the years, I have built successful businesses in India and abroad. I am also honoured to be a member of the Rajya Sabha.

I have been summoned before various investigative agencies and have duly attended and cooperated with each of them, and 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, and that my resignation from United Spirits was a step in this direction.

The payments from Diageo Plc to myself are towards my personal non compete obligations globally except in the UK. In effect, I have given up my interests in the spirits business globally at considerable cost.

I have always lived an honourable life and the calumny notwithstanding shall continue to do so. As to the allegations in the media, all I can say is I hope some sobriety and sense will prevail and truth not held a hostage to TRP.”