Billionaire Vijay Mallya has pumped another Rs 156 crore into his Formula One team ahead of the start of the motor racing season in Australia next week even as his debt-ridden Kingfisher Airlines (KFA) is struggling to survive back home.
According to a report published in the UK newspaper The Scotsman, accounts filed at Companies House for Silverstone-based Force India revealed that Watson, the personal investment vehicle used by the Indian tycoon, loaned the team nearly Rs 54 crore.
Mallya's KFA and beer and spirit businesses pumped in a further Rs 102 crore through sponsorship of the team, which finished in sixth place in the constructors' championship last season, the report adds.
Going by the UK report, the liquor tycoon seems to be splurging money on his car racing team at a time when he desperately seeking loans from public sector banks in India to keep the planes in the skies and does not have enough money to pay salaries to the airline's employees or make timely payment of jet fuel bills.
However, Prakash Mirpuri, spokesperson for Mallya, said, "The article is based on the financial accounts of Force India for the year ending December 31, 2010. Watson Limited is not Vijay Mallya's 'personal investment vehicle' and a loan of 6.85 million pounds was not made."
"Similarly, the sponsorship figures quoted by the author are completely incorrect and misinterpreted as these are multi-year promotional contracts 2008- 2010. It is well known that a major portion of any Formula One Team's annual budget is spent between the months of October- March on car design, build and pre- season testing," Mirpuri claimed.
"For 2011- 2012, the cash requirement of the Sahara Force India team have been fully met through the first »20 million investment made by the Sahara Group. Any attempt to misrepresent facts of 2010 and establish a link to the start of the 2012 Formula One sea- son next week is both malicious and factually incorrect." Several flights of the airline have been cancelled as pilots and other crew members are refusing to work non- payment of salaries since November. Mallya has also been defaulting on the payment of Kingfisher's jet fuel bills and held back income tax and service tax arrears resulting in the airline's bank accounts being frozen and causing further operational difficulties for the carrier.
While KFA on Tuesday claimed to have sorted out issues with its pilots over non- payment of their salaries, its pilots have threatened to continue their stir till the airline regularises their salaries. "Many pilots have already left and others are looking for better avenues," said a Kingfisher pilot.
Courtesy: Mail Today
Speaking to reporters here on Tuesday, Mallya said: "We are facing a serious handicap as our accounts are frozen. We are not asking for a bailout from the government but hope for help from the banking sector to defreeze our accounts." The airline has a debt of Rs 7,057.08 crore and the financial crunch has hit its operations with dozens of flights being either cancelled or clubbed.
Meanwhile, civil aviation minister Ajit Singh met Prime Minister Manmohan Singh in the run-up to the Union Budget to take up the concerns of the aviation industry.
Commercial airlines such as KFA are desperately seeking changes in the FDI policy on aviation and infrastructure status for the industry to lower the tax burden that they have to bear. Singh is also reported to have discussed the proposal for allowing 49 per cent foreign investment by international airlines in the domestic sector. After the meeting, Singh said that he had a wide- ranging discussion with the PM. However, he did not share the details.