- POSTED: 01 Sep 2014 23:18
The United Bank of India declared indebted tycoon Vijay Mallya a "wilful defaulter" on Monday (Sep 1), dealing another blow to his embattled Kingfisher Airlines.
MUMBAI: The United Bank of India declared indebted tycoon Vijay Mallya a "wilful defaulter" on Monday (Sep 1), dealing another blow to his embattled Kingfisher Airlines. A top official at the bank confirmed the decision, which comes nearly two years after the airline lost its licence to fly when it failed to end a strike by staff who had not been paid.
Kingfisher's debts run up to nearly US$1.5 billion (S$1.87 billion) owed to banks, airports, fuel suppliers, staff and others. Out of this, an estimated US$60 million is owed to UBI. "It will now be difficult for Mallya and Kingfisher Airlines to access any more funds from traditional banking sources," the UBI official said, declining to be named.
The next step would be for "the Reserve Bank of India to confirm Mallya's name as wilful defaulter and put a notice to that effect on its website," the official said. Mallya had been asked to appear in person before the bank to defend himself but he declined to do so, the Press Trust of India (PTI) reported.
Kingfisher's parent company, the United Breweries Group, declined to comment on the development. Kingfisher has not made any profit since it started operating in 2005, and owners of its grounded planes have taken them back.
"Kingfisher Airways died two years back. And after the UBI move, no revival is ever possible," said a top aviation sector consultant, requesting anonymity.
Other banks to which Mallya is also indebted have started similar proceedings against him, PTI reported. Links between Indian banks and their influential borrowers have come into focus in recent weeks after police arrested the chairman of the state-run Syndicate Bank over allegations he took bribes in exchange for loan extensions to private companies.
Mallya, once the self-proclaimed "King of Good Times", made his fortune through his liquor business but has been battling to maintain control over his empire. The businessman, also a co-owner of a Formula One team, was known to host lavish yacht parties with Bollywood stars and politicians as guests.