Kingfisher, Mallya were not authorised to use brand valuation report to raise funds: Grant Thornton
Global tax and advisory firm Grant Thornton has alleged that fugitive businessman Vijay Mallya's Kingfisher Airlines was not authorised to use its brand valuation report to raise funds.
- Oct 16, 2018,
- Updated Oct 16, 2018 8:06 PM IST
Global tax and advisory firm Grant Thornton has alleged that fugitive businessman Vijay Mallya's Kingfisher Airlines was not authorised to use its brand valuation report to raise funds. "The relevant engagement letter (contract) and the report itself specifically excluded use of the report for fund raising or other financing purposes," Grant Thornton responded in an email response to BusinessToday.In queries.
Grant Thornton had valued the Kingfisher brand at Rs 3,406 crore while another report by Brand Finance had valued it at just Rs 1,911 crore. Seventeen banks, including State Bank of India, IDBI Bank, Punjab National Bank, Bank of India and Bank of Baroda-have outstanding loans worth Rs 6956 crore.
Grant Thornton's brand valuation of Rs 3,406 crore in 2010 was the biggest collateral used by Mallya in a debt recast that was concluded with the 18 lenders by December that year. Mallya did not disclose the Brand Finance report to the lenders. Besides, the Grant Thornton report, Kingfisher had pledged security including Mumbai and Goa properties, choppers and office equipment as security, besides Mallya's personal guarantee of Rs 248 crore. Kingfisher's parent United Breweries had also issued corporate guarantees worth Rs 1,600 crore.
The airline which was already incurring losses. It could not sustain its operations and had to shut down operations in October 2012. Vijay Mallya fled the country in March, 2016. Banks have now claimed Rs 9,090 (including interest) from Mallya.
Grant Thornton response also says the objective of the valuation was 'internal use by the management of Kingfisher Airlines'. "We owed no duty of care to any other person or entity. Sharing of the report with third parties was prohibited without our specific prior permission. No requests were made to share the report with bankers and no permission was given by us for sharing the report with bankers for purposes of raising finance. No bank or banker approached or communicated with us regarding the brand valuation report," says the Grant Thornton response.
India has now sought Mallya's extradition from UK for trial at home on allegations of money laundering, and fund diversion.
Global tax and advisory firm Grant Thornton has alleged that fugitive businessman Vijay Mallya's Kingfisher Airlines was not authorised to use its brand valuation report to raise funds. "The relevant engagement letter (contract) and the report itself specifically excluded use of the report for fund raising or other financing purposes," Grant Thornton responded in an email response to BusinessToday.In queries.
Grant Thornton had valued the Kingfisher brand at Rs 3,406 crore while another report by Brand Finance had valued it at just Rs 1,911 crore. Seventeen banks, including State Bank of India, IDBI Bank, Punjab National Bank, Bank of India and Bank of Baroda-have outstanding loans worth Rs 6956 crore.
Grant Thornton's brand valuation of Rs 3,406 crore in 2010 was the biggest collateral used by Mallya in a debt recast that was concluded with the 18 lenders by December that year. Mallya did not disclose the Brand Finance report to the lenders. Besides, the Grant Thornton report, Kingfisher had pledged security including Mumbai and Goa properties, choppers and office equipment as security, besides Mallya's personal guarantee of Rs 248 crore. Kingfisher's parent United Breweries had also issued corporate guarantees worth Rs 1,600 crore.
The airline which was already incurring losses. It could not sustain its operations and had to shut down operations in October 2012. Vijay Mallya fled the country in March, 2016. Banks have now claimed Rs 9,090 (including interest) from Mallya.
Grant Thornton response also says the objective of the valuation was 'internal use by the management of Kingfisher Airlines'. "We owed no duty of care to any other person or entity. Sharing of the report with third parties was prohibited without our specific prior permission. No requests were made to share the report with bankers and no permission was given by us for sharing the report with bankers for purposes of raising finance. No bank or banker approached or communicated with us regarding the brand valuation report," says the Grant Thornton response.
India has now sought Mallya's extradition from UK for trial at home on allegations of money laundering, and fund diversion.