Karnataka court orders winding up of Vijay Mallya’s firm for dues
The Karnataka High Court on Tuesday ordered winding up of tycoon Vijay Mallya-owned United Breweries (Holdings) Ltd to recover dues of his now defunct Kingfisher Airlines Ltd.india Updated: Feb 08, 2017 00:16 IST
The Karnataka High Court on Tuesday ordered winding up of tycoon Vijay Mallya-owned United Breweries (Holdings) Ltd to recover dues of his now defunct Kingfisher Airlines Ltd.
Pronouncing the order, Justice Vineet Kothari directed the official liquidator to take possession of the holding company’s (UBHL) assets, including movable and immovable properties and its shares held in group companies, and recover the dues of creditors.
Among the creditors are a consortium of banks led by the State Bank of India (SBI) to whom the airline and UBHL owe a whopping Rs. 9,091 crore, including compound interest.
The debt-ridden airline, which grounded its operations in October 2012, also owes crores of dues to other creditors, aviation fuel suppliers and airport operators.
The judge also rejected an appeal by the UBHL to stay the order, which results in Mallya losing control over his properties, including shares in the group companies.
The group companies are United Spirits Ltd, United Breweries Ltd, UB Engineering and UB Global.
The UBHL gave a corporate guarantee on behalf of the airline to all the creditors and lenders for funds and supplies to run its operations.
“We will file an appeal against the combined order before the high court’s division bench, as the single-judge bench verdict is on petitions filed jointly in 2012,” a UBHL counsel told reporters later.
Various lenders and creditors to the airline, including French bank BNP Paribas, aircraft engine makers Rolls Royce and International Aero Engines and state-run Hindustan Petroleum Corporation Ltd filed also winding up petitions in January 2015 against the UBHL to recover their own outstanding amounts.
The winding up order comes weeks after the Bengaluru bench of the Debt Recovery Tribubal on January 19 ordered attachment and recovery of Mallya’s properties worth Rs 6,023 crore ($909 million) for unpaid loans Kingfisher borrowed from the consortium of 17 banks.
The flamboyant 61-year-old Mallya is reported to be in Britain since he left India on March 2, 2016 after the consortium moved the tribunal in February last year to expedite the hearing on its debt recovery petition.
When beleaguered Mallya did not respond to the tribunal’s earlier directives, the consortium in June 2016 sought a recovery certificate from it to sell off his properties in lieu of the defaulted loans to his airline.
The SBI and state-run Punjab National Bank had declared Mallya, the airline and its holding firm UBHL as “wilful defaulters” in 2015.
First Published: Feb 08, 2017 00:15 IST