Companies & Sectors
United Bank of India declares Vijay Mallya as wilful defaulter
The Grievance Redressal Committee (GRC) of the bank has declared directors Ravi Nedungadi, Anil Kumar Ganguly and Subash Gupte as wilful defaulters
 
State-run United Bank of India became the first lender to declare debt-ridden Kingfisher Airlines and its promoter Vijay Mallya as wilful defaulters.
 
“We have declared Vijay Mallya and three other directors of Kingfisher Airlines as wilful defaulters,” United Bank of India Executive Director Deepak Narang said.
 
The Grievance Redressal Committee (GRC) of the bank has declared directors Ravi Nedungadi, Anil Kumar Ganguly and Subash Gupte as wilful defaulters.
 
Post this declaration, these persons and the entity would not be able to borrow from the bank in future. They would also lose Director-level positions in companies. Criminal proceeding could also be initiated against these persons if warranted.
 
Mr Narang said the decision of GRC would be conveyed to the Finance Ministry, Reserve Bank of India, and Securities and Exchange Board of India for their information and action.
 
The GRC meeting was convened today after a Calcutta High Court division bench allowed the bank to initiate the process of declaring them as wilful defaulters last week.
 
The GRC had asked directors to be present before it but no one turned up. Instead, they had sent a letter through their lawyer stating that they had filed a Public Interest Litigation (PIL) in Supreme Court and pending the judgement the bank should not proceed in this regard.
 
The Kolkata-based bank is the first PSU lender to initiate the process of declaring Vijay Mallya and three other directors of the grounded Kingfisher Airlines as wilful defaulters a couple of months ago.
 
Subsequently, other banks such as State Bank of India, IDBI Bank and Punjab National Bank have also initiated the process of declaring KFA and its directors as wilful defaulters.
 
The bank’s exposure to Kingfisher Airlines was around Rs350 crore as part of consortium led by State Bank of India.

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Did RBI just drop Congress MP Rajeev Gowda quietly from its central board?
The Central Bank has issued no press release but Congress MP Rajeev Gowda and a designated party spokesman is no longer on the central board of directors of the RBI
 

The name of Dr Rajeev Gowda, Congress spokesperson and nominated Member of Parliament (MP) to the Rajya Sabha has suddenly vanished from the RBI website. Has this change occurred after the Bharatiya Janata Party (BJP) stormed to power in May this year or because Dr Gowda was nominated to the Rajya Sabha in July 2014?  Either way, Dr Gowda’s name does not figure on the RBI website or in the names listed in its recently released annual report. 
 
According to RBI’s communications head, Alpana Killawala, "Shri Rajeev Gowda ceased to be a member of our Central Board effective June 12, 2014." Interestingly, the RBI did not issue a press release announcing Dr Gowda’s exit. There is no mention of him in the annual report page, which mentions the directors of the central and regional board, although he was certainly a director for a part of the period of the annual report. Dr Gowda’s website mentions  that he is a “former” director on RBI’s central board.
 
Dr Gowda has impeccable academic credentials for being on the RBI’s central board. However, it was probably the first time that a politician and party spokesperson had been appointed to the RBI board. But then, that was the United Progressive Alliance’s (UPA) style of governance.
 
Although Dr M V Rajeev Gowda comes from a prominent political family of Karnataka, his credentials, we reiterate, are on par with the best on the RBI board. He was a professor of Economics and Sciences at the Indian Institute of Management, Bengaluru. He obtained his PhD from the Wharton School, University of Pennsylvania and has been an Associate Professor at the University of Oklahoma. 

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Fortnightly Market View: A Short-term Dip Possible
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