News Vijay Mallya’s USL exit: Kingfisher Airlines lenders to move DRT

Technoglitch

Technoglitch

Core Member
A consortium of 17 lenders to the long grounded Kingfisher Airlines Ltd will move the Debt Recovery Tribunal (DRT) against the airline chairman Vijay Mallya to stake claim to the $75 million severance package he will get to quit United Spirits Ltd (USL).

Last week, Mallya quit as chairman of USL after Diageo, the majority owner of the country’s largest liquor firm, agreed to pay him $75 million (Rs.515 crore) in a sweetheart deal that has now come under the glare of markets regulator Sebi as well as minority shareholders.

“Since Mallya had given personal guarantees for the loans given to Kingfisher, this money (which he will receive from Diageo) belongs to us. We have decided to move DRT to claim that money,” said a senior official from a public sector bank.

“We are making all out efforts to get our money back. We will use all the opportunities to recover our money,” said another state-run bank official.

Mallya and Kingfisher Airlines owed Rs.7,800 crore to a consortium of 17 lenders led by State Bank of India, which had an exposure of over Rs.1,600 crore to the now defunct airline. Other lenders include PNB, BoB, Canara Bank, Bank of India, Central Bank, Federal Bank, Uco Bank and Dena Bank among others.

A 17-member consortium led by SBI has also decided to auction Kingfisher House in Mumbai on 17 March in a bid to recover debt due from Kingfisher.

So far, the lenders have recovered around Rs.1,200 crore from their original exposure of around Rs.7,800 crore by selling pledged shares and other monetizable collaterals. Banks are charging 15.5% compounded interest on this principal amount, which have not been serviced since January 2012.

Vijay Mallya’s USL exit: Kingfisher Airlines lenders to move DRT - Livemint
 
Technoglitch

Technoglitch

Core Member
Over two lakh investors are estimated to be stuck with shares of long-grounded Kingfisher Airlines even as its lenders are now eyeing the Rs 515-crore bounty sealed by main promoter Vijay Mallya as part of a ‘sweetheart deal’ to exit United Spirits.

Diageo, the new owner of United Spirits Ltd (USL), has in return agreed to absolve Mr Mallya of all his ‘personal liabilities’ with regard to alleged financial irregularities relating to dealings with UB Group entities.

But USL has asserted that the recovery of loans worth Rs 1,337 crore would be pursued from United Breweries Holdings Ltd (UBHL) through ‘dialogue or other legal means’.

Interestingly, UBHL is now left with a total market value of just about Rs 148 crore although it continues to have more than 51,000 public shareholders, including over 50,000 small retail investors.

Other shareholders include 14 mutual funds, 14 banks/ financial institutions, 10 foreign portfolio investors, one insurer, one government entity, and nearly 100 high net-worth investors (HNIs).

The total number of public shareholders has come down from over 56,000 a year ago, including over 53,000 small retail investors and nearly 175 HNIs.

Mallya flies, but 2 lakh investors grounded - The Hindu
 
IndianMascot

IndianMascot

Core Member
This happens only in India. These bastards loot us and then settle in US or UK and enjoy rest of their life with our hard earned money. And we live life like Shit even after paying taxes and bribe to govt.
 
Technoglitch

Technoglitch

Core Member
They are basing their hypothesis that he is running away from newspaper reports -- that is just hearsay. He (Vijay Mallya) is a Rajya Sabha MP, to say he is skulking away, is to demean the Rajya Sabha... there is not even a whisper that he is trying to run away. He is an MP who has given thousands of crores to the Government of India (by way of business/taxes)… They must thank themselves for this... Stop hounding people, you can't file for an arrest just like that."

Thus thundered Uday Holla, ace legal eagle and former Advocate General, who is representing liquor baron Vijay Mallya in the Debt Recovery Tribunal in Bengaluru. Court cases rarely have a Kyunki-Saas-Bhi Kabhi Bahu Thi kind of appeal, but if any of them come close, then this would be it.

The case in question: State Bank of India's application before the Debt Recovery Tribunal in Bengaluru on Friday. SBI went to court asking that liquor baron Vijay Mallya be made to hand over the 75 million dollars he got in a recent sweet deal with British liquor company Diageo.

The plea being taken up on priority is that of garnishee -- the legal term referring to SBI's claim over the money Mallya is getting from USL -- that is, first SBI's outstanding dues must be paid before Mallya is paid. SBI had gone to court because Mallya, and his erstwhile Kingfisher Airlines, owes it (and a few other banks) about Rs 7200 crore in all -- debt plus interest taken by the airliner when it was still seeing good times.


For the record, Mallya had sent a statement to all media outlets on February 25, through his official media coordinator who operates with a United Breweries Holdings Ltd mail id. In that, he said, "Having recently turned 60 I have decided to spend more time in England, closer to my children." Holla further said that big loan defaulters like Essar who owe banks Rs 40,000 crore are being let off, while banks are going after Kingfisher's Rs 2,000 crore" where there is no illegality, merely the losses (to the airline company) which happened because of fuel prices.''

Deepa Balakrishnan's Blog : Banks vs Mallya in court: 'Is it a sin to take money?' asks liquor baron's lawyer; 'No, it is a sin not to pay it back', counters SBI
 
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