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Vijay Mallya: From ‘owner of Kingfisher’ to ‘king of bad loans’

Loan defaulter, beleaguered liquor baron, proclaimed offender – there are several adjectives associated by the director of the now defunct Kingfisher Airlines Vijay Mallya

India TV Business Desk Edited by: India TV Business Desk New Delhi Updated on: October 03, 2017 18:51 IST
Vijay Mallya: From ‘owner of Kingfisher’ to ‘king of
Image Source : PTI Vijay Mallya: From ‘owner of Kingfisher’ to ‘king of bad loans’

Loan defaulter, beleaguered liquor baron, proclaimed offender – there are several adjectives associated by the director of the now defunct Kingfisher Airlines Vijay Mallya. 

Over 18 months after he fled India in order to evade legal proceedings in connection with loan defaults worth Rs 9,000 crore, Mallya was today arrested in London in connection with a money laundering case. He was, however, released on bail after being produced in Westminster Magistrate’s court. 

Today’s arrest was similar to the one by Scotland Yar in April this year which was done on behalf of Indian authorities on an extradition warrant. The arrest was a part of the extradition process in the UK which requires its law enforcement authorities to effect an arrest to set the procedure in motion.

Also Read: 'Fugitive' Vijay Mallya arrested in London in money laundering case, released on bail

Mallya, whose now-defunct Kingfisher Airlines owes more than Rs 9,000 crore to various banks, had fled India on March 2, 2016. While his sneaking out from the country on a quiet night on March 2 created quite an uproar at home, his run with the law in India and his flamboyant lifestyle was no less controversial either.

Mallya has been declared a proclaimed offender and there are multiple warrants pending against him in India in several cases including loan default and money laundering.

Following his father’s death, Mallya became the chairman of liquor firm United Breweries in 1983 at the age of 28. With Mallya at its helm, the group grew into a multi-national conglomerate of over 60 companies in a short span of time.

In 2003, Vijay Mallya started Kingfisher Airlines that really became the trouble maker for the business tycoon. Loans taken to 'revive' the dying carrier led to the piling up of defaults.Taking over Air Deccan was another mis-step in that direction.

Until December 2011, Kingfisher Airlines had the second largest share in India's domestic air travel market. However, the airline faced financial issues and its share dropped to the lowest in the market in April 2012.

On October 2, 2012, Kingfisher declared partial lock-out following a strike by a section of its employees. Also, a non-bailable warrant was issued against Mallya and four directors on October 12, the same year.

On October 20, 2012, the DGCA suspended its flight certificate. The suspension resulted from the airline's failure to give an effective response to the show-cause notice issued by the DGCA. 

On October 25, 2012, its employees agreed to return to work. In February 2013, the government announced the withdrawal of both domestic and international flight entitlements allocated to the airline.

Vijay Mallya, Kingfisher and United Breweries (Holdings) were named wilful defaulters by a consortium of banks. Apart from SBI, United Bank of India and Punjab National Bank declared Kingfisher and Mallya wilful defaulters. They moved the court seeking the freezing of his passport. 

In August 2014, State Bank of India alleged that funds were diverted several times from Kingfisher Airlines to various UB Group companies and other firms. They alleged that United Breweries (Holdings), the parent company, had been “deliberately avoiding payment to lenders”.

There was fresh trouble for Mallya in August 2014 when CBI instituted a preliminary inquiry against IDBI Bank and KFA. The bank had sanctioned a loan of Rs 950 crore, despite KFA having a negative rating.

On October 10, 2015, CBI conducted searches at Mallya’s offices and questioned him in December. Thereafter, in February 2016, PNB declared UB Holdings a wilful defaulter. 

The SBI-led consortium of lenders moves the debt recovery tribunal (DRT) to attach Mallya’s passport. Mallya moved to London to evade arrest. It is said that he flew out of India on March 2, 2016.

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