Vijay Mallya loans back to haunt Manmohan, Chidambaram; BJP, Congress engage in war of words

Vijay Mallya may have fled the country 10 months ago but his proverbial ghost has returned to haunt the Congress leadership - former prime minister Manmohan Singh, former finance minister P Chidambaram and Congress president Sonia Gandhi. New evidence that has emerged from the ongoing investigation in the Kingfisher scam — in the form of letters written by Mallya to Manmohan, Chidambaram and internal emails between Mallya and his top executives in the United Breweries group from mid-2010 to 2013, wherein he gave out details about how the government of the day favoured him to overrule reservations expressed by lending banks — has put the UPA-2 government back in the dock. Hours later, in a joint press conference, which was otherwise scheduled to trash the state of the economy under the Narendra Modi regime, Manmohan and Chidambaram did not deny the existence or veracity of the contents of correspondence with Mallya, and the action taken by various government departments. [caption id=“attachment_3123028” align=“alignleft” width=“380”] New evidence has emerged in the Kingfisher scam in the form of letters written by Vijay Mallya to former prime minister Manmohan Singh. AP[/caption] Instead, they termed them as “ordinary routine pieces of paper”. Their defence, in trying to hide behind a small technicality, was too thin to give them a shield from the heap of evidence that has been introduced against the Congress leadership in the Mallya-Kingfisher bailout. Despite suggestions that banks like SBI, its subsidiaries and the IDBI bank had taken adverse positions against Mallya’s Kingfisher, it has emerged that he was given undue preferential treatment by the erstwhile UPA government. Congress vice-president Rahul Gandhi and other Congress leaders, however, have been accusing the Modi government of allowing Mallya to flee from the country. Congress and other Opposition parties have even disrupted proceedings of Parliament on several occasions over the issue. Mallya managed to slip out of the country to London in March last year, leaving behind a total outstanding due, in various cases including interest, of close to Rs 9,000 crore. A CNN-News18 report, citing documents including Mallya’s letters and mails, has brought the issue back into focus. Ahead of the Assembly elections in five states, the Mallya and Kingfisher bailout by UPA-2 has now become a huge political issue. The ruling BJP pounced on the issue and held a special media briefing to charge that “a party which became a sinking ship (Congress) bailed out a sinking airline (Kingfisher)”. Besides the evidence of wrongdoing, as shown by the CNN-News18 report and later by Times Now, BJP spokesperson Sambit Patra came armed with additional documents to add his party’s political tadka to the mix. From Patra’s tone and tenor, it was clear that BJP leaders were going to exploit the Mallya case to the hilt, to once again hit the Congress hard over the issue of corruption. Some time back, former IDBI chairman Yogesh Aggarwal, and four other ex-officials of the bank, including ex-deputy managing director BK Batra, were arrested for issuing a several-hundred crore loan to Mallya despite the bank’s own assessment revealing that he had no capacity to repay the loans and despite the fact that the liquor baron had not submitted the papers required to process such a loan. Patra said that the Mallya case is a classic case of duping the ordinary man. He then went on to ask why any common man or woman was required to furnish volumes of documents to avail small loans, when Mallya was not required to follow such regulations. That too, when Mallya’s companies were declared as Non-performing assets (NPAs). But despite all this, in December 2010, his loans were restructured when he was unable to pay even one-tenth of the money he owed. Patra went on to attack the Congress party and said that the “corrupt hands were pulling strings” as the banks couldn’t have done this on their own and that “these were not the hands Rahul Gandhi had seen in the pictures of Gods”, adding that the ‘hands belonged to the then (UPA-2) prime minister and finance minister’. He then read out a letter written by Mallya to Manmohan: “Thank you for sparing time to meet me on 8 September  to explain the difficulties being faced by Kingfisher Airlines. I had also informed your good self that we had approached our consortium of Banks, led by State Bank of India to grant us additional financial support urgently. You had asked me to follow up with TKA Nair, which I did and I am deeply appreciative of the fact that Mr Nair immediately spoke to the concerned people in the ministries involved…” He added that Mallya sought the prime minister’s “kind indulgence” in a second letter as well. Mallya sent out copies of the letter to Manmohan, his adviser TKA Nair and his Principal Secretary Pulok Chatterjee. Quoting an excerpt from a book written by Manmohan’s media adviser – The Accidental Prime Minister – Patra said that “Pulok Chatterjee used to run with all the files every evening to 10 Janpath, even before the PM saw it.” Union Finance Minister Arun Jaitley had earlier described Mallya as a “terrible legacy” which the NDA government had inherited from UPA. In November 2011, while returning from a foreign tour, Manmohan had said on board the Air India One: “Private sector airlines have to be managed efficiently if they do get into difficulties. We have to find ways and means to help them get out of their losses. But I have not applied my mind to Kingfisher’s problems. When I get back, I will talk to Mr Vayalar Ravi (then civil aviation minister) and we will explore ways and means in which the airlines can be helped.” [caption id=“attachment_3153930” align=“alignright” width=“380”] Vijay Mallya had sought P Chindmabaram’s “urgent intervention” to direct the SBI to issue NOCs. Agencies[/caption] The most damning of the letters written by Mallya is a communication by him to the then finance minister written on 21 March, 2013, where he sought Chindmabaram’s “urgent intervention” to direct SBI and its subsidiaries to issue no-objection certificates, so that the Mallya-owned UB Group could issue preferential shares to raise capital. A day later, on 22 March, Mallya wrote in an internal mail to his CFO that following his meeting with Chidambaram “positive development” has taken place. It said that after the “finance minister rebuke”, SBI Bangalore had agreed to issue the NOC. “There have been some positive developments following my meeting with FM and SGP. SBI Bangalore have called USL and are now willing to issue NOC  for the preferential allotment… SBI would have also got directions to meet with us. Please reach out to the (SBI) Chairman’s office and Shyamal’s office by email and phone and request a meeting on 25 March,” Mallya’s mail to his CFO said. Responding to a pointed question to CNN-New18, Manmohan said: “Well all prime ministers and other ministers in any government receive representations from industry captains. It is normal to pass it to appropriate authorities. What I have done was done with full satisfaction, we were not doing anything which was against laws of land. It was a routine thing, it was an ordinary route piece of paper. The letter which is being talked about is nothing.” Manmohan  then passed on the mic to Chidambaram, who added, “The government, especially the prime minister’s and finance minister’s office receive 100s of representations every day. They are marked down to the departments concerned to take appropriate action. There is nothing wrong if someone wants policy change and if a letter is marked by the prime minister to the principal secretary, and then marked to ministries.” Chidambaram, in his defence for a letter mentioning him, said that the loan under investigation was from 2009, when he was not in office and that the letter talked about UB Group not Kingfisher. He also said that the request was not for a loan but rather about issuing an NOC for preferential shares. In response to BJP’s charge, the Congress chose to ask counter questions, without talking about the allegations levelled against them. Congress spokesman Randeep Surjewala asked ‘why did the BJP allow Mallya to leave country’ and questioned that ‘who had supported him to become an MP in 2010’.