Vijay Mallya has lost a battle, but the war is far from over for Indian banks he stiffed
The 62-year-old - who remains on a GBP 650,000 bail bond (over Rs 5.93 crore) since his arrest on an extradition warrant by Scotland Yard last April - is probably plotting the next course of action with his lawyers.
- May 9, 2018,
- Updated May 9, 2018 9:58 PM IST
The King of Good Times-turned-fugitive Vijay Mallya may have lost a lawsuit filed by a consortium of Indian banks seeking to collect more than $1.55 billion from him, but celebrations on the part of the lenders may be premature. Because, as a banker pointed out to Firstpost, "Even in India, there have been court orders to attach his assets, but how much has been achieved so far?"
Precious little, will be the pithy answer. Kingfisher Villa, Mallya's sea-facing property in Goa, was sold to actor-businessman Sachiin Joshi of Viiking Media & Entertainment for 73 crore after three failed auctions. In March, the government reportedly put up Kingfisher House located in Mumbai for auction, unsuccessfully for the seventh time. Despite the 17-lender consortium led by State Bank of India halving the reserve price to Rs 75 crore - the property was first put on the block in March 2016 with a minimum price tag of Rs 150 crore - there have been no takers.
Similarly, the Service Tax Department has had a hard time trying to auction off Mallya's private luxury jet, seized by the department in December 2013. Despite the reserve price being cut to $12.5 million from the earlier $22.5 million on the HC's direction, four auctions failed to find any takers. However, another smaller jet was successfully auctioned off by the Mumbai International Airport Ltd (MIAL) in 2015 - sold to a local scrap dealer for Rs 22 lakh. According to the report, there hasn't been much progress in the recovery process apart from the above.
Mallya's Kingfisher Airlines was grounded in 2012. Mallya, his airline and its holding company, United Breweries Holdings, were tagged as wilful defaulters two years later. He fled the country in March 2016, defaulting on loans of over Rs 9,000 crore. He has been successfully stringing Indian banks and authorities along ever since.
The 62-year-old - who remains on a GBP 650,000 bail bond (over Rs 5.93 crore) since his arrest on an extradition warrant by Scotland Yard last April - is probably plotting the next course of action with his lawyers. Citing senior bankers the portal said that he still has many legal options available to him, including moving the Court of Appeals or approaching the local ministry for relief.
But the banks that Mallya stiffed have plenty to worry about, over and above the ballooning interest component on the bad debt he left behind. According to the report, UK high court judge Andrew Henshaw pointed out in his judgement that the most important risk banks are facing is a sharp deterioration in the value of Mallya's assets that can be recovered.
Actually, the problem faced by the Indian banking sector is far larger. The government admitted last month that less than half of the staggering Rs 9 lakh crore worth of non-performing assets (NPAs) accumulated by banks have returned due to the system set in place by the Insolvency and Bankruptcy Code (IBC), 2016.
Meanwhile, the Indian government has been pressing for cooperation from Britain in extradition of not just Mallya but 12 others, including former IPL honcho Lalit Modi and cricket bookie Sanjiv Chawla, but without much success.
With agency inputs
The King of Good Times-turned-fugitive Vijay Mallya may have lost a lawsuit filed by a consortium of Indian banks seeking to collect more than $1.55 billion from him, but celebrations on the part of the lenders may be premature. Because, as a banker pointed out to Firstpost, "Even in India, there have been court orders to attach his assets, but how much has been achieved so far?"
Precious little, will be the pithy answer. Kingfisher Villa, Mallya's sea-facing property in Goa, was sold to actor-businessman Sachiin Joshi of Viiking Media & Entertainment for 73 crore after three failed auctions. In March, the government reportedly put up Kingfisher House located in Mumbai for auction, unsuccessfully for the seventh time. Despite the 17-lender consortium led by State Bank of India halving the reserve price to Rs 75 crore - the property was first put on the block in March 2016 with a minimum price tag of Rs 150 crore - there have been no takers.
Similarly, the Service Tax Department has had a hard time trying to auction off Mallya's private luxury jet, seized by the department in December 2013. Despite the reserve price being cut to $12.5 million from the earlier $22.5 million on the HC's direction, four auctions failed to find any takers. However, another smaller jet was successfully auctioned off by the Mumbai International Airport Ltd (MIAL) in 2015 - sold to a local scrap dealer for Rs 22 lakh. According to the report, there hasn't been much progress in the recovery process apart from the above.
Mallya's Kingfisher Airlines was grounded in 2012. Mallya, his airline and its holding company, United Breweries Holdings, were tagged as wilful defaulters two years later. He fled the country in March 2016, defaulting on loans of over Rs 9,000 crore. He has been successfully stringing Indian banks and authorities along ever since.
The 62-year-old - who remains on a GBP 650,000 bail bond (over Rs 5.93 crore) since his arrest on an extradition warrant by Scotland Yard last April - is probably plotting the next course of action with his lawyers. Citing senior bankers the portal said that he still has many legal options available to him, including moving the Court of Appeals or approaching the local ministry for relief.
But the banks that Mallya stiffed have plenty to worry about, over and above the ballooning interest component on the bad debt he left behind. According to the report, UK high court judge Andrew Henshaw pointed out in his judgement that the most important risk banks are facing is a sharp deterioration in the value of Mallya's assets that can be recovered.
Actually, the problem faced by the Indian banking sector is far larger. The government admitted last month that less than half of the staggering Rs 9 lakh crore worth of non-performing assets (NPAs) accumulated by banks have returned due to the system set in place by the Insolvency and Bankruptcy Code (IBC), 2016.
Meanwhile, the Indian government has been pressing for cooperation from Britain in extradition of not just Mallya but 12 others, including former IPL honcho Lalit Modi and cricket bookie Sanjiv Chawla, but without much success.
With agency inputs