The 2,42,000 sq ft of land in Pune returned by President Patil is to be ‘suitably’ used for an alternative purpose. Communication from the ministry of defence is awaited, said Southern Command officials
Although President Pratibha Patil has returned the 2,42,000 sq ft of land in Pune on which she was building her palatial post-retirement home, construction continues on the site.
Senior officials at the Southern Command headquarters said since the construction is half done, it is being allowed to be completed. Assuring that it would be used 'suitably' as per the stringent norms of A1 defence land, they also clarified that A1 land 'can' be used for residential accommodation of jawans. However, they failed to answer how the same construction meant for a palatial personalised home could be converted for accommodation of jawans, which would obviously comprise a series of small tenements.
So far, Rs5 crore have been spent by the Southern Command. The construction work comes directly under the Army Commander with MES having given the contract to private contractors (allegedly not registered with the MES). However, senior officials of the Southern Command said they are waiting for orders from the ministry of defence (MoD), for the nature of the re-use of the sprawling construction site.
When asked as to how, in the first place, the Southern Command gave permission for a civilian home on A1 land, Maj Gen SK Yadav stated that they were merely following the orders of the ministry of defence. When told that the MoD had questioned 'precedence' of such an allocation, the Defence Estate Office was mum in its reply, the officers stated that they had "raised objections" but refused to spell out anything further.
In an unprecedented and curious move, the Southern Command, after coming under storm for bending backwards to construct President Patil's palatial post-retirement home on 2,42,000 sq ft of A1 defence land, decided to hold a press conference on Tuesday to "put the records straight" on land issues including official accommodation for serving officers and jawans not only in the Pune station but the entire command comprising 10 states and three Union Territories.
Pune is an important military station but officers are made to wait for between six months and one year to get an official accommodation and there is a woeful lack of homes for jawans in particular. It is against this background that President Patil's retirement home came under sharp criticism, as besides the legal aspect, the question of the propriety and precedence was questioned.
Maj Gen C P Singh, in charge of logistics and operations, stated that, "to make up the overall deficiency of married accommodation with an outlay of Rs56 crore-84 officers, 27 junior commissioned officers (JCOs) and 250 other ranks (OR) houses were constructed in 2011 and with an approximate projection of Rs.95 crore, 188 officers, 60 JCOs and 300 ORs houses are in various stages of completion in Married Accommodation Project Phase II. Satisfactory levels of accommodation will increase to above 90% for all ranks on completion of second phase."
Compilation and digitalisation of land records in Southern Command is underway but they had no answer to the number of encroachments on defence land and what specific action they have taken on the 2009 Pune Defence Estate Office report of such encroachments.
In February, Kingfisher allotted shares to banks and financial institutions against optionally convertible debentures, thus reducing stake of UB Holding. The question is who are these smart bankers who put money into the carrier which has been reporting losses since its inception
Vijay Mallya-led United Breweries (Holdings) (UBH), the majority shareholder in troubled Kingfisher Airlines said that the carrier ceased to be its subsidiary in February itself after the airlines allotted shares against optionally convertible debentures to certain entities. However, UBH said it had a significant exposure of over Rs12,000 crore to the debt-ridden airline.
In a regulatory filing, the UB Group unit said, "The company has significant exposure on various counts to Kingfisher Airlines as on March 2012. These include investment in equity/preference capital at Rs2,118.48 crore, corporate guarantees to banks and aircraft lessors at Rs6732.55 crore and Rs2,193.31 crore, respectively.". As on 10th May, UBH has a market cap of Rs416 crore.
According to a September 2011 report by Canadian research firm, Veritas, the finances of Kingfisher were so bad that they would drag down its parent United Breweries (UB) too. It had said, "UB, which has marketable assets of Rs4,713.40 crore ($1,037 million), compared to guarantees provided on behalf of Kingfisher of Rs16,853 crore ($3,638 million), is also staring into a black hole. We believe that the ill-conceived foray into the airline business has already cost UB shareholders dearly, and that their ownership of India's premier liquor and beer assets has been sacrificed at the altar of egoistic ambitions."
Kingfisher Airlines has pledged its brand as collateral with its lender consortium for Rs4,100 crore ($817.95 million). The brand valuation was done by Grant Thorton in 2010. Reportedly the brand has been valued and loans raised worth three times the carrier's market value.
On 6 July 2011, pursuant to requirements prescribed under the debt recast package, Kingfisher's founder companies, UBH and Kingfisher Finvest, pledged their entire stake in the airline with certain of its lenders.
Announcing its financial results for the fourth quarter ended March 2012, which saw its net profit plunging sharply by over 83% to Rs2.10 crore, UB Holdings, said that Kingfisher ceased to be a subsidiary as on 18th February, after the carrier allotted shares against optionally convertible debentures to certain entities.
Noting that it has given significant guarantees on behalf of its subsidiaries and associate companies, UB Holdings said its exposure to Kingfisher Airlines totalled Rs12,215.18 crore as on March 2012. The company's exposure relating to Kingfisher Airlines is under various accounts including corporate guarantees to banks. Total exposure include "advances at Rs1,029.75 crore and other receivables Rs141.09 crore", it added.
"Certain corporate guarantees have been invoked and Kingfisher Airlines is under negotiation in this regard with the beneficiaries," UBH said in the filing.
"In our view, the debt restructuring touted by Kingfisher is nothing to write home about. We believe that non-performing loans have been rechristened/repackaged into subordinated debt, and that Kingfisher has defaulted on its obligations is unquestionable. We do not believe that KAIR's antics would have found any takers in a responsible credit market and that the airline would have been liquidated by now," Veritas had said.
As on 31 December 2011, UBH had 40.1% stake in the carrier, but it declined to 34.55% on 18th February after an increase in the airline's equity base pursuant to issue of shares to some entities in lieu of certain convertible bonds.
As per the latest shareholding pattern available with the BSE, UB Holdings' stake in Kingfisher has declined further to 29.39% as on 24th April. The entire holding of UB Holdings in Kingfisher is as such pledged, BSE data shows.
UB Holdings further said that its investment in subsidiaries have been considered as long term strategic investments and diminution in their market value, though significant is considered temporary in nature.
The company said guarantee commission has been accrued based on contractual obligation, although the recovery could take a longer period of time than what was anticipated.
UB Holdings has been giving significant guarantees on behalf of subsidiaries and other associated companies and advances to subsidiaries. No amount has so far devolved on the company, the filing said.
In an indication of a showdown with the Kingfisher management, a section of the Delhi-based pilots reported sick on Thursday, while their Mumbai counterparts decided not to fly from tonight
Mumbai: A section of Kingfisher pilots have decided not to fly from tonight to protest "backtracking" by the management on its "assurance" of remitting their January salaries from 9th May, a move which is likely to compound the woes of fliers already hit by the ongoing stir by Air India pilots.
"The management had said that it would start giving January salaries from 9th May onwards. However, it has backtracked on its commitment," Kingfisher sources told PTI.
According to sources, Kingfisher Airline Chairman Vijay Mallya had "assured" the staff in his 5th May communication of remitting their January salaries from Wednesday onwards.
In an indication of a showdown with the management, a section of the Delhi-based pilots of the cash-strapped airline reported sick on Thursday, while their Mumbai counterparts decided not to fly from tonight, the sources said.
The Kingfisher spokesperson was not available for comment.
At 2.23pm, Kingfisher was trading a percent down at Rs13.8 on the Bombay Stock Exchange, while the Sensex was marginally down at 16,462.