Vijay Mallya Says Take My Money To Save Jet Airways!

Moneylife Digital Team 26 March 2019

Economy & Nation

The Jet Airways deal has naturally evoked a strong reaction from fugitive industrialist Vijay Mallya, whose flight to the UK has made him the poster boy of industrialists who flee the country after duping banks. Mr Mallya has taken to Twitter to voice his views.

Alleging double standards under the National Democratic Alliance (NDA) government while dealing with debt-ridden carriers, Mr Mallya asks why his Kingfisher Airlines was not given the same treatment by bankers as they are giving to Jet Airways.

He tweeted: "Happy to see that PSU Banks have bailed out Jet Airways saving jobs, connectivity and enterprise. Only wish the same was done for Kingfisher (Airlines)."

Mr Mallya points out that he had placed liquid assets before the Karnataka High Court to pay off his lenders, the public sector bank (PSBs) and all other creditors.

"Why do the banks not take my money? It will help them to save Jet Airways if nothing else," he tweeted.

Mr Mallya owes banks Rs9,000 crore with interest, while Jet’s outstanding was only a little lower at Rs8,000 crore. The Kingfisher Airlines chief has always claimed that he has offered much more than he owes in terms of assets, to settle his dues.

And I repeat once again that I have placed liquid assets before the Hon’ble Karnataka High Court to pay off the PSU Banks and all other creditors. Why do the Banks not take my money. It will help them to save Jet Airways if nothing else.
— Vijay Mallya (@TheVijayMallya) March 26, 2019

A consortium of 17 banks, led by the State Bank of India (SBI), had sanctioned loans of Rs5,500 crore over a decade back to Mr Mallya's now defunct Kingfisher Airlines. He claims that he had invested over Rs4,000 crore to save Kingfisher Airlines and its employees. However, he says, "(this effort) not recognised and (I was) instead slammed in every possible way. The same PSU banks let India’s finest airline (Kingfisher) with the best employees and connectivity fail ruthlessly. Double standards under NDA."

I invested over 4000 crores into Kingfisher Airlines to save the Company and its employees. Not recognised and instead slammed in every possible way. The same PSU Banks let India’s finest airline with the best employees and connectivity fail ruthlessly. Double standards under NDA
— Vijay Mallya (@TheVijayMallya) March 25, 2019

Mr Mallya also accused a spokesperson for Bharatiya Janata Party (BJP) for 'eloquently' reading his letters to the then prime minister Manmohan Singh, alleging support by the united progressive alliance (UPA) to Kingfisher.

BJP spokesman eloquently read out my letters to PM Manmohan Singh and alleged that PSU Banks under the UPA Government had wrongly supported Kingfisher Airlines. Media decimated me for writing to the current PM. I wonder what has changed now under the NDA Government.
— Vijay Mallya (@TheVijayMallya) March 25, 2019

The Kingfisher Airlines chief also asked why the current government led by prime minister Narendra Modi is not asking banks to accept money he has put on the table.

Following on from my earlier tweet, I respectfully ask why the Prime Minister is not instructing his Banks to take the money I have put on the table so he can at least claim credit for full recovery of public funds lent to Kingfisher.
— Vijay Mallya (@TheVijayMallya) February 14, 2019

In June 2018, Mr Mallya had approached the Karnataka HC requesting permission for him and his group companies to sell their assets under judicial supervision and pay creditors. "This cannot be dismissed as frivolous. It is a perfectly tangible, sincere, honest and readily achievable offer. The shoe is on the other foot now. Why don’t the banks take the money lent to Kingfisher Airlines?" he had asked.

I have made the offer to settle before the Hon’Ble High Court of Karnataka. This cannot be dismissed as frivolous. It is a perfectly tangible, sincere, honest and readily achievable offer. The shoe is on the other foot now. Why don’t the Banks take the money lent to KFA ?
— Vijay Mallya (@TheVijayMallya) February 14, 2019

The liquor baron fled the country in March 2016. He has been living in London since then. In May 2018, he lost a lawsuit filed by 13 Indian banks in the UK High Court seeking to collect from him more than $1.55 billion.

While Mr Mallya may have a point in what he says, there are a few big differences. First, he attracted a lot of public anger by continuing to flaunt his flamboyant lifestyle and personal wealth, especially on social media, even as Kingfisher Airlines' customers suffered losses due to cancelled flights, while hardworking employees were left in the lurch and without a salary for months on end. Mr Mallya had even omitted to pay taxes and provident fund dues, in what was seen as another attempt to pressure lenders to bail him out again.

Secondly, he had used his influence to get lenders, mainly IDBI Bank, to accept the Kingfisher Airlines brand, which had no real value, as collateral and provided personal guarantees that he refused to honour.

Thirdly, Mr Mallya has a long record of finding ways to game the judicial system to delay the resolution of any action against him by various investigation agencies. The loans to Kingfisher Airlines were certainly seen as part of the notorious ‘phone banking’ pressures under the previous government.

And, finally, Mr Mallya has also been accused of money laundering by the enforcement directorate, so his problems today are a lot worse than they were when he fled to the UK.

Having said that, it will be interesting to see how the Indian government justifies the demand to extradite Mr Mallya, when Jet Airways, which was in a similar financial mess, has been bailed out. At the very least, it gives Mr Mallya’s lawyers a chance to argue ‘vendetta’ when he fights his extradition in the appellate proceedings.

Comments

User

AAR

7 years ago

Maintaining low profile helps to avoid judgement through media.

Pankaj Malhotra

7 years ago

The question is who is going to foot the 8000 crore + 1500 crore debt, if SBI is unable to find an investor. Secondly if this was under IBC, promoter would have no right to bid for the asset. Here by keeping it outside the IBC, they have kept a window for Goyal to get back into the airline. Also EY was doing a forensic audit of Jet, what happened to that? There are many unanswered questions!! Mallya unfortunately has become a posterboy of NPAs, when Anil Ambani, Goyal, etc got a better deal even outside IBC

S Balakrishnan

Replied to Pankaj Malhotra comment 7 years ago

Agree it looks as though goyal walks Scot free losing only his anyway worthless shares. Even so the guy wouldn't let go. Sbi's chairman no less had to beg him.
For the sake of avoiding negative publicity,sbi is willing to lose 1500 cr plus God knows what if it becomes liable for the huge arrears of aircraft lease rents.
Money does grow on trees for the sbi.

Pankaj Malhotra

Replied to S Balakrishnan comment 7 years ago

The biggest thing is media had SBI made winner who had to literally beg to Naresh Goyal to step down even after defaults. Media should realise that Naresh Goyal has only stepped down, not repaid the debt. God help our country!!