The two-year old letter that Vijay Mallya released on Tuesday ‘to put things in right perspective’ doesn’t say anything new. Facts presented in the letter is already in the public domain. At best, it appears to be a desperate attempt by the liquor baron for an image makeover.
But, the fundamental problem with Vijay Mallya’s April 2016 letter is this: he still treats the Kingfisher loan case as a case of business failure, whereas the investigators, the government and banks have gone past this point, moving to a broad range of charges of money laundering, fund diversion and other financial irregularities.
Mallya believes an Indian-government sponsored witch-hunt is targeting him and continues to play the victim-card from the UK, whereas, his legal adversaries, so to say, find him to be an outlaw, who has no respect for the laws of the land. These contradictions have formed the basis of the Mallya vs the rest case. That has been so since the day he flew out of India in March, 2016 and that remains the case even now.
From being a poster boy of the Indian civil aviation sector to the poster boy of bad loans, Mallya’s rise and fall is a good case study of all that is wrong with the Indian banking sector today.
To be fair, Mallya deserves sympathy, for he is only a small fish in a large pond of loan defaulters and fraudsters thriving on the corporate-banker nexus.
For instance, one can argue that comparted with what the uncle-nephew duo of Mehul Choksi and Nirav Modi did to the Punjab National Bank (PNB), Mallya’s charges would be less serious in nature.
Mallya’s default to some 17 state-run banks could be well over Rs 9,000 crore now (according to bankers’ estimates and adding the interest component), a figure Mallya disputes vehemently (according to him, this is a hugely inflated figure). That disagreement on the defaulted loan amount will be a major hurdle if and when Mallya comes forward with a settlement offer. According to the 2016 letter, Mallya promised settlement at that point.
But, the crux of the case against Mallya, at this point, is not the loan default but the charges of financial fraud. As this Business Today report said, according to a fresh chargesheet submitted by the Enforcement Directorate (ED), one of the Indian agencies chasing Mallya, the tycoon and his firms, Kingfisher Airlines Limited (KAL) and United Breweries Holdings Limited (UBHL), fraudulently diverted “over Rs 3,700 crore [of] bank loan funds to a UK-based F1 motorsport firm, a T20 Indian Premier League (IPL) team and for enjoying private jet sorties”. Also, on multiple occasions Mallya has failed to present himself before Indian courts in the recent years.
It is this defiant approach towards the judiciary, the banks and the investigators that has made Mallya an easy target and a poster boy of the bad loans mess, despite being a relatively smaller fish in the big NPA pond.
The intense media scrutiny and court battles, in turn, forced the Narendra Modi government and politicians to take on Mallya in public. With the Indian government revoking Mallya’s passport and pitching for his extradition from the UK, the whole affair became a contentious bilateral issue between India and the UK, turning the spotlight on the embattled businessman.
The release of the two-year old letter, mailed to the prime minister and the then finance minister, is a desperate attempt by Mallya for an image makeover but it has come too late and will unlikely do any good for him.
If Mallya indeed believes in an image makeover and is confident that there is merit in his version of the case, the right step for him would be to return to India and face the laws of the land, even risking imprisonment.
Until then, the Vijay Mallya narrative will lack credibility.
Updated Date: Jun 27, 2018 10:11 AM