ED enables over Rs 300 crore payout for ex-employees of Kingfisher Airlines

The Enforcement Directorate (ED) has facilitated the release of Rs 311.67 crore for disbursement to former Kingfisher Airlines employees. This follows an order from the Debts Recovery Tribunal (DRT) in Chennai directing that funds realised from the sale of attached shares be transferred to the official liquidator for payment to workers. The move resolves years of uncertainty over unpaid dues after the airline's collapse.

The ED had earlier attached properties under the Prevention of Money Laundering Act (PMLA) to form an asset pool for restitution. Properties valued at Rs 14,132 crore were restituted to the State Bank of India (SBI) under Section 8(8) of the Act, aimed at recovering losses from financial offences, including bank loan fraud. These recovered assets have enabled the current disbursement for employee claims.

The agency worked with stakeholders, including SBI, to prioritise the settlement of workmen dues. The ED engaged with senior officials of SBI and facilitated utilisation of PMLA restituted assets for payment of employee claims.

The DRT's order dated December 12 required the release of funds to the official liquidator, who will distribute the Rs 311.67 crore among former employees of the now-defunct airline. This payment addresses claims pending since Kingfisher Airlines was grounded.

The ED confirmed, "Acting upon ED's facilitation, SBI approached the DRT by filing an application and offering the restituted assets for discharge of workmen dues and expressly consenting to the priority of such dues over secured creditor claims." This ensured worker claims were settled before those of other secured creditors.

The ED had registered the case against Kingfisher Airlines, Vijay Mallya, and others for alleged bank loan fraud under PMLA provisions. Vijay Mallya was declared a fugitive economic offender in 2019 under the Fugitive Economic Offender Act of 2018.