Firstpost
  • Home
  • Video Shows
    Vantage Firstpost America Firstpost Africa First Sports
  • World
    US News
  • Explainers
  • News
    India Opinion Cricket Tech Entertainment Sports Health Photostories
  • Asia Cup 2025
Apple Incorporated Modi ji Justin Trudeau Trending

Sections

  • Home
  • Live TV
  • Videos
  • Shows
  • World
  • India
  • Explainers
  • Opinion
  • Sports
  • Cricket
  • Health
  • Tech/Auto
  • Entertainment
  • Web Stories
  • Business
  • Impact Shorts

Shows

  • Vantage
  • Firstpost America
  • Firstpost Africa
  • First Sports
  • Fast and Factual
  • Between The Lines
  • Flashback
  • Live TV

Events

  • Raisina Dialogue
  • Independence Day
  • Champions Trophy
  • Delhi Elections 2025
  • Budget 2025
  • US Elections 2024
  • Firstpost Defence Summit
Trending:
  • PM Modi in Manipur
  • Charlie Kirk killer
  • Sushila Karki
  • IND vs PAK
  • India-US ties
  • New human organ
  • Downton Abbey: The Grand Finale Movie Review
fp-logo
Crash and burn: Game over for Mallya as he loses top posts at Kingfisher, MCFL
Whatsapp Facebook Twitter
Whatsapp Facebook Twitter
Apple Incorporated Modi ji Justin Trudeau Trending

Sections

  • Home
  • Live TV
  • Videos
  • Shows
  • World
  • India
  • Explainers
  • Opinion
  • Sports
  • Cricket
  • Health
  • Tech/Auto
  • Entertainment
  • Web Stories
  • Business
  • Impact Shorts

Shows

  • Vantage
  • Firstpost America
  • Firstpost Africa
  • First Sports
  • Fast and Factual
  • Between The Lines
  • Flashback
  • Live TV

Events

  • Raisina Dialogue
  • Independence Day
  • Champions Trophy
  • Delhi Elections 2025
  • Budget 2025
  • US Elections 2024
  • Firstpost Defence Summit
  • Home
  • Business
  • Corporate
  • Crash and burn: Game over for Mallya as he loses top posts at Kingfisher, MCFL

Crash and burn: Game over for Mallya as he loses top posts at Kingfisher, MCFL

FP Archives • December 2, 2014, 15:15:52 IST
Whatsapp Facebook Twitter

In a double-whammy for flamboyant businessman Vijay Mallya, the government has annulled his re-appointment as Managing Director of Kingfisher Airlines while he also had to quit from board of another group company MCFL.

Advertisement
Subscribe Join Us
Add as a preferred source on Google
Prefer
Firstpost
On
Google
Crash and burn: Game over for Mallya as he loses top posts at Kingfisher, MCFL

In a double-whammy for flamboyant businessman Vijay Mallya, the government has annulled his re-appointment as Managing Director of Kingfisher Airlines while he also had to quit from board of another group company MCFL.

This comes close on the heels of minority shareholders of United Spirits, once a prized entity of Mallya-led UB group, rejecting proposals regarding proposed financial dealings of the company with entities connected to him.

Govt says no to Vijay Mallya’s reappointment as Kingfisher Airlines MD

STORY CONTINUES BELOW THIS AD

Kingfisher, which had to be grounded in October 2012 due to severe financial crunch and mounting debt, had sought the Corporate Affairs Ministry’s approval for Mallya’s re-appointment for a period of five-year beginning October 16, 2013 “without remuneration”.

More from Corporate
Maha: Court orders Rs 30L compensation for parents after youth dies in road accident Maha: Court orders Rs 30L compensation for parents after youth dies in road accident Ashleigh Barty comes from set down to beat Coco Gauff in Australian Open lead-up Ashleigh Barty comes from set down to beat Coco Gauff in Australian Open lead-up

The airline said in a regulatory filing today that its application has been rejected, but did not disclose any specific reason. Government sources, however, said that the decision was taken because Kingfisher failed to get necessary approvals from its lenders and shareholders for the re-appointment.

Mallya resigns from Mangalore Chemicals
The disclosure came on a day, when another UB Group firm Mangalore Chemicals and Fertilizers Ltd (MCFL) announced Mallya’s resignation as a director without giving any reason.

Trading in Kingfisher and UB Engineering suspended
Trading in shares of Kingfisher and another group firm UB Engineering also got suspended with effect from today because of the companies’ non-compliance to listing norms.

Kingfisher market value just about Rs 100 crore
Kingfisher, which once prided itself as the most luxurious airline with Mallya being known as the ‘King of Good Times’, alone used to command a market value of over Rs 10,000 crore once, but now stands at just about Rs 100 crore. The overall UB group market value has tanked by over half in the past one year, while excluding United Spirits. The penal action by stock exchanges followed the companies’ inability to prepare and publish financial results in time, which the firms have attributed to lack of staff.

STORY CONTINUES BELOW THIS AD

Kingfisher has previously faced strong staff protests for non-payment of salaries, while it is also under regulatory scanner for various accounting lapses. As per the latest disclosures made to the stock
exchanges, Mallya was serving as Chairman and Managing Director of Kingfisher, which has been without a full-time CEO ever since Sanjay Agarwal left the company early this year.

As per the norms, a company which is in the red or has inadequate profits, needs to approach the Corporate Affairs Ministry to get approval for appointment of key managerial personnel and directors and get no-objection certificates from shareholders and lenders. The Ministry rejected the proposal in this case as it was already turned down by shareholders and lenders, sources said, while adding this particular decision was not directly linked to Mallya being declared a wilful defaulter.

UB Group’s financial troubles
The UB group, which once commanded huge market values for all its entities in businesses ranging from liquor to fertilisers to aviation, has been facing financial troubles for past couple of years and a severe cash crunch led to Kingfisher Airlines being grounded over two years ago. There are also pending service tax default cases against Kingfisher. Default on loan payments has already seen a number of banks resorting to legal options to reclaim their funds, while some of them have also declared Mallya as a wilful defaulter. Among various key assets, UB Group sold controlling stake in United Spirits Ltd (USL) to UK-based global liquor giant Diageo, while Mangalore Chemicals and Fertilisers (MCFL) recently saw two rival bidders slugging it out in the marketplace for getting a control of the company.

STORY CONTINUES BELOW THIS AD

Without giving any specific reason, MCFL said in a regulatory filing today that “Vijay Mallya, a Director on the Board of Directors of the company, has resigned with immediate effect.”

Mallya’s resignation at Mangalore Chemicals falls a takeover battle between Zuari and Deepak Fertilisers

58-year old and Kolkata-born Mallya’s resignation at MCFL followed an intense takeover battle between West Bengal-based Zuari group and Pune-based Deepak Fertilisers for wresting control of MCFL, which has a urea plant at Mangalore. The plant has been shut since October this year due to expiry of permission given by the government for production of farm nutrient from high cost feedstock naptha.

Bangalore-headquartered UB Group Chairman Mallya had sided with Zuari group and launched the counter open offer to ward off the takeover bid of Deepak Fertilizers. Deepak Fertilisers has raised its stake in MCFL to about 32 percent, as against Zuari-UB group’s combined stake of 38.4 per ent. The latest developments at Kingfisher and MCFL follows decisions by USL shareholders at a November 28 meeting toreject nine out of 12 resolutions, including some pertaining to proposed pacts with entities connected to Mallya.

STORY CONTINUES BELOW THIS AD

These pacts included those dated September 30, 2011 and December 22, 2011 between USL and and United Breweries Holdings Ltd that required UBHL to sell to USL certain immovable properties. Other resolutions that were defeated with requisite majority include approval of a services agreement dated July 3 2013 between USL and Kingfisher Finvest India, approval of a sponsorship pact dated June 11 2013 between USL and United Racing & Bloodstock Breeders, approval of a sponsorship pact between USL and United Mohun Bagan Football Team Pvt Ltd.

USL is now controlled by Diageo, which had acquired an additional 26 percent shares in USL for Rs 11,448.91 crore in July with an aim to take its total stake in the Indian firm to 54.78 percent.
Liquor baron Vijay Mallya was recently re-elected as non-executive director and chairman of United Spirits.

Kingfisher Airlines is already facing a close regulatory scrutiny

The airline is facing a regulatory scrutiny over suspected lapses in its accounting practices and the Corporate Affairs Ministry is looking into possible violations of Companies Act. The carrier is yet to submit its annual financial results for the 2013-14 period to the stock exchanges. In a filing to the BSE on August 26, the carrier had said that steps were being taken to appoint directors in order tocomply with provisions of the Companies Act, 2013 and listing agreement with the stock exchanges.

STORY CONTINUES BELOW THIS AD

“Thereafter, steps will be taken towards publishing the audited results for the year ended March 31, 2014 and for the quarter ended June 30, 2014,” it had said. Back in May, Kingfisher had informed stock exchanges that “there are hardly any employees attending office and the company is currently operating with skeletal staff making it difficult to audit and publish the results in time.”

As part of the recovery process, banks in February last year decided to sell a portion of the collateral with them, including shares of its group companies USL and MCFL, Mallya’s Goa villa, Kingfisher House in Mumbai and the Kingfisher brand, which was valued at over Rs 4,000 crore at the time it was pledged. The total market value of UB group companies currently stands at Rs 33,000 crore largely because United Breweries Ltd (over Rs 20,000 crore), where Heineken group is a co-promoter.

PTI

Tags
Kingfisher Airlines Vijay Mallya Deepak Fertilisers Mangalore Chemicals Zuari
End of Article
Written by FP Archives

see more

Latest News
Find us on YouTube
Subscribe
End of Article

Top Stories

Russian drones over Poland: Trump’s tepid reaction a wake-up call for Nato?

Russian drones over Poland: Trump’s tepid reaction a wake-up call for Nato?

As Russia pushes east, Ukraine faces mounting pressure to defend its heartland

As Russia pushes east, Ukraine faces mounting pressure to defend its heartland

Why Mossad was not on board with Israel’s strike on Hamas in Qatar

Why Mossad was not on board with Israel’s strike on Hamas in Qatar

Turkey: Erdogan's police arrest opposition mayor Hasan Mutlu, dozens officials in corruption probe

Turkey: Erdogan's police arrest opposition mayor Hasan Mutlu, dozens officials in corruption probe

Russian drones over Poland: Trump’s tepid reaction a wake-up call for Nato?

Russian drones over Poland: Trump’s tepid reaction a wake-up call for Nato?

As Russia pushes east, Ukraine faces mounting pressure to defend its heartland

As Russia pushes east, Ukraine faces mounting pressure to defend its heartland

Why Mossad was not on board with Israel’s strike on Hamas in Qatar

Why Mossad was not on board with Israel’s strike on Hamas in Qatar

Turkey: Erdogan's police arrest opposition mayor Hasan Mutlu, dozens officials in corruption probe

Turkey: Erdogan's police arrest opposition mayor Hasan Mutlu, dozens officials in corruption probe

Top Shows

Vantage Firstpost America Firstpost Africa First Sports
Latest News About Firstpost
Most Searched Categories
  • Web Stories
  • World
  • India
  • Explainers
  • Opinion
  • Sports
  • Cricket
  • Tech/Auto
  • Entertainment
  • IPL 2025
NETWORK18 SITES
  • News18
  • Money Control
  • CNBC TV18
  • Forbes India
  • Advertise with us
  • Sitemap
Firstpost Logo

is on YouTube

Subscribe Now

Copyright @ 2024. Firstpost - All Rights Reserved

About Us Contact Us Privacy Policy Cookie Policy Terms Of Use
Home Video Shorts Live TV