Addendum
Fugitive and fallen Kingfisher Airlines’ Mallya pleads for debt deal
July 1st 2018
Former King of Good Times and also the former CEO of failed Kingfisher Airlines, Vijay Mallya, is fighting India’s application for his extradition from Britain to the end. Read More » In June, he asked the Indian authorities to permit him to sell assets to pay down debt due to several Indian banks and also declared he had been discriminated against in the country of his birth.
Mallya, who has been living in exile in London since 2016, continues to plead innocence of fraud charges laid against him by various Indian law enforcement agencies. Claiming he has become “the poster boy” of bank default and “a lightning rod of public anger” he said he is being pursued for “variously untenable and blatantly false allegations” related to the 2012 collapse of Kingfisher Airlines. The airline shut down, with debts of US$2 billion, after it could not pay for fuel for its flights.
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Indian investigators said an estimated US$1.3 billion of the funds is owed to government owned banks. They submit the exiled drinks baron, who inherited his fortune from his father, was part of a dishonest plot to obtain large loans from several banks, including the IDBI, with no intention of repaying the loans.
Cronyism runs deep in Indian politics argues James Crabtree in his book, The Billionaire Raj: A Journey through India’s New Gilded Age, in a corruption of the state that allegedly facilitated the allocation of a seat in India’s Upper House for Mallya, courtesy of a US$10 million donation to the ruling party of the time.
Crabtee’s book explains that before new prime minister, Narendra Modi began to break down the power of India’s Congress nationalized banks had to lend money to the favoured few for infrastructure projects knowing it would never be repaid.
Under Modi, insolvency procedures were toughened and debtors can no longer shield their assets from creditors, wrote Crabtree. It was situation that forced Mallya into exile.
In the meantime, Mallya said that in 2016 he offered to repay 44 billion rupees (US$642 milion) of the 50 billion rupees he said was outstanding. Investigators declined the offer. Shielded by shelf companies, Mallya owns an eleven million pounds sterling estate in Hertfordshire and is alleged to have distributed up to US$30 million to his three children to hide his true worth.
The next stage in the extradition battle is set for the British courts this month.
