In a 1998 interview, Indian liquor baron, Vijay Mallya told the interviewer, British-Indian Nikki Bedi, who compared him to Donald Trump.
"I don't know Mr Trump personally. I've read a lot about him. He obviously likes to live his life, as I indeed do... but not yet anywhere near bankruptcy."
Eighteen years later, Mallya is not bankrupt for sure. But, he is being chased by 17 banks and investigative agencies for the default of Rs 9,000 crore loans and various charges of financial irregularities. Indian courts have issued summons and arrest warrants to him.
Also, Mallya, rumored to be in his 30 acre 'Lady Walk' house near London, is slowly losing the control of his empire — the latest being the Kingfisher House — perhaps, the last standing monument of his personal pride in the aviation sector. When he bids adieu to KFA house, it won’t be just another day for Mallya.
No takers for now
On Thursday, an online auction conducted by SBI Cap to sell Kingfisher House flopped as there were no bids. But banks will auction it again with revised terms. As long as Mallya stands as a major defaulter on KFA loans and a wilful defaulter, he is set to lose Kingfisher Hose sooner or later.
For the sprawling 17,000 square feet mansion that headquartered the Kingfisher Airlines, bankers had set a base price of Rs 150 crore. Even if the auction succeeded, it would have fetched banks only a fraction of what is at stake. Located in Andheri, the building once represented the glory of India's first luxury airline and its flamboyant boss, who called himself the 'King of Good Times'. Mallya can do little to not lose control of KFA House.
The drinks mogul has been cornered by investigators and banks. The Enforcement Directorate has summoned Mallya on Friday in Mumbai in connection with the IDBI Bank loan money laundering case. However, on Thursday, Mallya sought time till April to appear before ED. A Hyderabad court has issued multiple non-bailable arrest warrants against him in cheque bouncing cases. The Supreme Court has issued a look-out notice. Almost all national investigative agencies are competing each other to announce how they are widening the probe on Mallya.
The man, once showed Indians how a 'King' lives in modern times, is today the subject of jokes in social media. Politicians, who once vied each other to claim Mallya's camaraderie, are now using harsh words to distance themselves from him. Kingfisher employees, for whom Mallya was a living God once, are up in arms against him citing their salary dues. For most, today Mallya is a symbol of 'bad times'.
To be sure, Mallya still have a fortune. He still holds shares worth Rs 7,000 crore in companies and palatial Bungalows in various countries. But, Mallya is losing control of his business empire. He stepped down as chairman of USL while Heinken, his once equal partner, is attempting to wrest the control of his family silver the UB group. Banks, who have lost patience, have begun to auction the assets of Kingfisher Airlines, grounded in 2012.
Mallya, who left India on 2 March with seven bags and an unidentified woman, has been on denial mode that he is an absconder. “As an Indian MP, I fully respect and will comply with the law of the land. Our judicial system is sound and respected. But no trial by media,” Mallya said on 10 March. But, Mallya has not spoke of his intention on when to return to India or the roadmap to repay dues to banks and employees.
Lot more at stake for banks
If, for Mallya, his personal pride is at stake, there is a lot more is at stake for the 17-banks, which lent money to him and are sitting on a big NPA pile. As mentioned earlier, even if banks manage to sell Kingfisher assets and the remaining assets they have against the Kingfisher loans, it would make up for only a small part of their total exposure. To put it in other words, Rs 9,000 crore public money is at stake.
The Kingfisher loan turned NPA to banks in 2012. Among the 17 banks, SBI has the largest exposure with about Rs 2,000 crore exposure.
The only chance for banks to recover their money is if Mallya returns to the country and offers to pay back them from his personal wealth. As it appears, chances for that are narrow.
Published Date: Mar 18, 2016 09:00 am | Updated Date: Mar 18, 2016 09:08 am