Companies & Sectors
Mallya’s UB Holding too identified as wilful defaulter by United Bank

After declaring Kingfisher Airlines and its four directors, including Vijay Mallya as defaulter, the United Bank has identified United Breweries Holdings, the guarantor to this loan, as wilful defaulter


United Bank of India has identified Vijay Mallya-led United Breweries Holdings, the guarantor of grounded Kingfisher Airlines, as wilful defaulter.


The bank has already declared Kingfisher Airlines and its four directors, including Mallya, as wilful defaulters.


"We have identified United Breweries (UB) Holdings as wilful defaulter because company had the resources to repay the loan as guarantor of Kingfisher Airlines," United Bank's executive director Deepak Narang has said.


UB Holdings had additional resources available as per the balance sheet of 2013-14, he said, adding, these funds could have been used for paying loans given to Kingfisher.


The bank issued notice to the UB Holdings and got a reply, which was not satisfactory.


"We would take further action after due deliberations on the issue," he added.


In September this year, UBI became the first lender to declare debt-ridden Kingfisher Airlines, its promoter Vijay Mallya and other directors wilful defaulters as the company allegedly indulged in diversion of funds by opening multiple accounts.


The other directors declared as wilful defaulters by the Grievance Redressal Committee (GRC) of the bank are Ravi Nedungadi, Anil Kumar Ganguly and Subash Gupte.


Kingfisher Airlines and directors declared as wilful defaulters now will not be able to borrow from banks in the future. They would also lose director-level positions in companies and criminal proceeding could be initiated against them, if warranted, to recover the money.


The bank had first given notice to declare Kingfisher Airlines as wilful defaulter on 28th May. However, the company approached Calcutta High Court against the notice.


A single bench dismissed the company's plea. Subsequently, it approached double bench, which upheld the single bench order on 28th August.


UBI's exposure to Kingfisher Airlines was around Rs350 crore as part of consortium led by State Bank of India.


The consortium of 17 banks has an outstanding debt of about Rs6,521 crore from the now-grounded carrier. Outside the consortium, UBI gave about Rs60 crore loan for pre-delivery payment.


E-commerce covered under Consumer Protection Act, says Danve

Replying to a query on number complaints of cheating and other malpractices by e-commerce companies, the minister said such companies are covered under the consumer law


E-commerce will be covered under the Consumer Protection Act and the central government will not face any loss in indirect tax revenue due to expansion of online retail business, the Indian Parliament was informed on Tuesday.


In a written reply to the Lok Sabha, Minister of State for Food and Consumer Affairs Raosaheb Patil Danve said, "E-commerce operations are already covered under the Consumer Protection Act, 1986".


He was replying to a query whether there is any proposal to bring e-commerce operations under the Consumer Protection Law in view of complaints of cheating and other malpractices by such companies.


Danve said trading of goods by e-commerce does not attract levy of service tax.


"Goods which are imported, manufactured are cleared on payment of duty of customs, central excise, as the case may be, at the time of import, clearance from the factory.


"Therefore, as far as the Central Government is concerned, there is no loss to indirect tax revenue due to expansion of e-commerce," Danve said.


The Consumer Protection Act provides for better protection of consumers interest. Under the law, consumer forums have been set up for the settlement of disputes.


To further strengthen this law, the government is planning to introduce amendments to the Consumer Protection Act (CPA) 1986 in the ongoing Winter session of Parliament.


SEBI bars Federal Agro, Kolkata Aryan and Waris Agrotech from collecting money

SEBI found that these companies garnered capital from several investors through issuance of redeemable preference shares


Market regulator Securities and Exchange Board of India (SEBI) has restrained Federal Agro Commercials Ltd (FACL), Kolkata Aryan Food Industries Ltd (KAFIL) and Waris Agrotech (India) Ltd (WAL) from mobilising funds from investors.


Continuing with strict action against entities raising public money illegally, SEBI has also barred these three companies and their directors from accessing the securities market.


The market regulator found that the companies had garnered capital from several investors through issuance of redeemable preference shares (RPS) and had “prima facie” violated various norms.


SEBI observed that issues by these three firms were made to more than 50 people. Under the rules, that made them public issues of debt securities requiring compulsory listing on a recognised stock exchange. They were also required to file their prospectus, which they failed to do.


The regulator, in three separate orders, said that Federal Agro Commercials, Kolkata Aryan Food Industries and Waris Agrotech are prima facie engaged in fund mobilising activity from the public, through the offer of redeemable preference shares and as a result of such activities has violated the provisions of the Companies Act.


Accordingly, SEBI has asked FACL, KAFIL and WAL “not to mobilise funds from investors through the offer of RPS or through the issuance of equity shares or any other securities, to the public and/or invite subscription, in any manner whatsoever, either directly or indirectly, till further directions”.


Further, the companies and their directors are barred from issuing any offer document or advertisement for soliciting money from the public for the issue of securities.


These firms and their respective directors are restrained from accessing the securities market.


SEBI has also asked the entities not to dispose of any of the properties or assets acquired by that company through the issue of redeemable preference shares, without prior permission from the regulator as well as not to divert the funds raised from public.


While asking FACL, KAFIL and WAL to provide a full inventory of all its assets and properties, SEBI has also asked these companies to within 21 days from the date of receipt of the order submit all relevant and necessary particulars sought by the watchdog.


The directions shall take “effect immediately and shall be in force until further orders,” Sebi said in its yesterday’s order.


According to SEBI, FACL raised Rs25.94 lakh from 310 investors, KAFIL mopped-up Rs49.64 lakh via 115 persons and WAL allotted redeemable preference shares to 475 individuals and mobilised funds amounting to about Rs36 lakh.


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