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How Vijay Mallya gets to lord over his wealth even as bankers chase him

Vijay Mallya’s case is quite different from the Satyam scandal, where founder Ramalinga Raju admitted to doctoring accounts and went to jail.

editorials Updated: Apr 25, 2018 18:11 IST
Narayanan Madhavan
Narayanan Madhavan
Hindustan Times
Vijay Mallya has been in the dock ever since his ambitious airline venture Kingfisher landed in financial troubles and got eventually grounded in October 2012. (PTI)

When you speak of Vijay Mallya, horses and stud farms may just be the right examples to illustrate his elegant movements.

Perhaps we should be asking banks that wanted him held back in India to recover whatever money they can recover from him arising from loan defaults by Kingfisher Airlines he founded and grounded: Has the horse bolted the stable?

Well, anyone with horse sense will know by now that the beer baron’s financial condition is not quite, er, stable. Unless you count his personal wealth that spans everything from race horses and football clubs to a sword used by Tipu Sultan.

We should not also forget a pair of Mahatma Gandhi’s spectacles he owns. Partly because he is usually seen in designer shades, and not the round, rimless variety worn by the Father of the Nation in his austere way. Austerity is not something you associate with Mallya anyway.

Read Mallya misled govt, employees: Former women staff of Kingfisher Airlines

Attorney General Mukul Rohatgi, representing the consortium of banks to whom the baron owes about Rs 7,000 crore, has informed the Supreme Court that Mallya left India on March 2 – days before headlines screamed the banks wanted him held back.

The man may be in one of the castles he owns in Scotland, or who knows, in his apartment in Manhattan’s swank Trump Towers, where he might just bump into Donald Trump and improve future bilateral relations with the US, just in case the xenophobic Republican gets elected. Something tells us the two will just get along fine.

Read more: Vijay Mallya left country in spite of look-out notice against him by CBI

But hey, how does he manage to lord over all that wealth while the bankers are after him?

Now, the magic lies in the thing called the limited liability company. So, when you borrow from a “limited” company, your personal liability in repaying any money owed by the company you may virtually own is limited. And, as you wonder about the nuances of how banks can claim only the assets you pledge and not what you own in general, please do take a moment to think of economist John Maynard Keynes, who once famously said: “If you owe your bank manager a thousand pounds, you are at his mercy; if you owe him a million pounds, he is at your mercy.”

Read Did lenders flout rules while pledging the KFA brand for loans?

Mallya’s case is quite different from the Satyam scandal, where founder Ramalinga Raju admitted to doctoring accounts and went to jail. The nuance of the law is different when you default – as distinct from an act of fraud.

So Mallya’s stud farms and ear studs alike can stay intact, and he does not have to auction his Bulgari/Maybach shades, not to speak of Mahatma Gandhi’s spectacles.

Come to think of it, Mallya doesn’t need those Gandhi glasses. You know, he is pretty good at making a spectacle of himself.

First Published: Mar 10, 2016 08:25 IST