the chairman of the now defunct Kingfisher Airlines, is caught between the devil and the deep blue sea with banks rejecting his settlement offer to pay Rs 4,000 crore by September and the Supreme Court directing him to disclose by April 21 all assets owned by him and his family in India and abroad.
It is a double whammy for the so-called ‘King of Good Times’, who is facing legal proceedings for defaulting on debt now amounting Rs 9,000 crore from various banks.The airline that sealed Mallya's fateMay 2005:
Kingfisher Airlines (KFA) takes off, providing world class facilities in air travel, attracting many passengers in the initial years. Mallya took a micro-level interest in the operations, even hiring many of the cabin crew himself. Adding glamour to the launch of the airlines, Yana Gupta, a Bollywood actress, appeared in a safety-instructions video.
The Indian government may not be able to get liquor baron Vijay Mallya back into the country anytime soon, with the United Kingdom (UK) declining to deport the industrialist. The UK has instead suggested extradition based on a treaty signed between countries in 1993. It has also offered legal assistance based on a Mutual Legal Assistance Treaty (MLAT) signed in 1992. 2006:
Mallya sent a proposal to IDBI Bank, seeking funds to expand his fleet. It was turned down as not many were convinced with the acquisition plan.October 7, 2009:
The bank provided a loan of Rs 900 crore to the carrier, a decision that has come back to hurt the bank.2007-2008:
Mallya does a reverse merger with Captain Gopinath-promoted Air Deccan. He merged KFA into the low-cost carrier to bypass a government stipulation that said an airline should have been in operation for five years and have at least 20 aircraft – generally known as the 5/20 rule – to be able to fly overseas. Many see this deal as the first step towards the downfall of Kingfisher Airlines.Difficult timesNovember 2010:
Debt restructuring and fresh loans. The airline had run up a debt of Rs 934 crore by the end of March 2008. In the following year, the airline accumulated a debt of over Rs 7,000 crore by 2009. Losses continued to pile up and the airline turned into a non-performing asset (NPA) for banks.
To make matters worse, fresh loans were sanctioned in November 2010 after banks restructured Kingfisher’s debt. Lenders stretched the period of repayment of loans to nine years with a two-year moratorium (legal authorised period of delay) and interest rates were also cut.
According to PTI reports, Mallya's KFA was given loan to the tune of Rs 6,963 crore by various banks for which Kingfisher provided a pooled collateral security of Rs 5,238.59 crore, including Kingfisher House in Mumbai, Kingfisher Villa in Goa, and hypothecation of helicopters (valued around 250 crores).2012:
Tax authorities froze KFA’s accounts over non-payment of tax deducted at source from employees’ salaries. KFA was also unable to pay airports authority, and oil companies soon moved it to a cash-and-carry basis. The airline started cancelling flights, and eventually shut down multiple routes before becoming defunct. In the interim, KFA also defaulted on employee salaries, only occasionally paying part of back salaries and eventually stopped doing that as well. In January 2012, SBI chairman Pratip Chaudhuri announced that KFA had become an NPA on December 31, 2011.April 2015:
Mumbai International Airport Private Limited (MIAL) sold Mallya’s personal aircraft (its registration number, VT-VJM, matches his initials) for Rs 22 lakh to recover airport dues of the grounded airline. Adding insult to injury, the service tax department seized eight aircraft and helicopters of the firm, including Mallya’s prized Airbus A319 over non-payment of service tax of over Rs 115 crore.November 2015:
SBI declares Vijay Mallya a ‘wilful defaulter’, a term that means the company or individual who borrowed money has no intention of paying it back.Mallya checks out2016:
The industrialist was back in the news with his Rs 515-crore ‘sweetheart deal’ with Diageo to step down as chairman of liquor major United Spirits. The agreement raised questions about possible violations of corporate governance and other norms.
Within a week of the deal, Attorney General Mukul Rohatgi told the Supreme Court that Mallya had left for the United Kingdom.Series of summonsApril 2, 2016:
Mallya misses appointment with ED (Enforcement Directorate), seeks extension to May; ED refuses, issues final summons for April 9, asking him to appear to depose in investigations under the Prevention of Money Laundering Act, failing which it will take legal steps to get him back.Matters get worseApril 8, 2016:
There seems to be no end to Mallya’s troubles as he finds himself named in the Panama Papers leaks as well. He has been linked directly to an offshore firm registered in the British Virgin Islands (BVI), which has been operational from February 2006, The Times of India reported, citing details accessed from the website of International Consortium of Investigative Journalists (ICIJ).
Even before the Panama Papers became public, Business Standard reported that Mallya was suspected of moving as much as Rs 4,000 crore in 2007 from United Spirits to an offshore account ahead of the takeover by Diageo in 2012. April 29, 2016:
The Government of India asked the UK to deport Vijay Mallya, citing revocation of his passport and a non-bailable warrant against him.May 11, 2016:
In a big boost to Mallya, Britain declined the Indian government's bid to deport the industrialist. The UK said "under the 1971 Immigration Act, the UK does not require an individual to hold a valid passport in order to remain in the UK, if they have extant leave to remain, as long as their passport was valid, or enter UK was conferred".
However, Britain has suggested extradition based on a treaty signed between the nations in 1993. #Source: BS