SC to hear banks plea against Mallya today: What we know so far
Worried about the fate of loans worth thousands of crores of rupees given to the now-defunct Kingfisher Airlines, a consortium of 17 banks on Tuesday moved the Supreme Court seeking to restrain industrialist Vijay Mallya from leaving India.Updated: Mar 09, 2016, 09:57 IST
Worried about the fate of loans worth thousands of crores of rupees given to the now-defunct Kingfisher Airlines, a consortium of 17 banks on Tuesday moved the Supreme Court seeking to restrain industrialist Vijay Mallya from leaving India.
Attorney General Mukul Rohatgi on Tuesday sought an urgent hearing of the petition filed by 17 banks, including the State Bank of India, which also sought the impounding of Mallya’s passport.
The banks’ move comes a day after the Enforcement Directorate registered a money laundering case against Mallya and the Debt Recovery Tribunal (DRT) barred him from touching the Rs 515 crore settlement he reached with Diageo. The DRT will hear the matter again on March 28.
The ED case is based on a CBI probe into alleged “wilful default” by the high-flying owner of Kingfisher Airlines on a Rs 900-crore loan in conspiracy with IDBI Bank representatives.
The creditors, led by the State Bank of India, have stepped up efforts to recover the debt - $1 billion as of end-January 2014 - after Mallya last month resigned as chairman of spirits maker United Spirits, a unit of Diageo.
The SBI, the largest lender of Kingfisher, had approached the DRT in Bangalore to restrain Mallya from withdrawing Rs 515 crore he got as a severance package from London--based Diageo.
Kingfisher, once India’s second-biggest airline, stopped flying more than three years ago.
Banks owed money by Kingfisher Airlines have demanded “first right” to the Diageo cash, arguing that they were left with unpaid debts worth Rs 7,000 crore when the company collapsed more than three years ago.
SBI declared Mallya— once known as “The King of Good Times” for his flashy lifestyle and lavish parties— a wilful defaulter last month. A wilful defaulter is one who uses borrowed funds for purposes other than it was meant for.
SBI and others have also appealed to the Karnataka high court that the businessman be arrested and his passport impounded.
Earlier, former Kingfisher Airlines employees had written an open letter blaming Mallya for the grounding of the carrier and damaging the country’s reputation in the aviation industry.