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Kingfisher Airlines, Vijay Mallya declared wilful defaulters

3 Sep 2014 00:18:50

timesofindia.indiatimes.com

NEW DELHI: United Bank of India on Monday declared Kingfisher Airlines and its promoter Vijay Mallya a 'wilful defaulter' in a move that will choke fresh fund flow to public companies promoted by the flamboyant businessmen or those on which he is a director.


Several others lenders to whom Kingfisher owes over Rs 4,000 crore, including State Bank of India, Punjab National Bank and IDBI Bank, are expected to follow suit. The Reserve Bank of India and the Securities & Exchange Board of India are also working on ways to prevent wilful defaulters from tapping stock and bond markets, although it is not clear if the new rules will apply to companies which have already been given the tag.


Apart from Mallya and his debt-laden airline, directors Ravi Nedungadi, Anil Kumar Ganguly and Subash Gupte have also been declared wilful defaulters, UBI executive director Deepak Narang told TOI, while confirming that the decision was taken by the Grievance Redressal Committee.


He said that the Kolkata-headquartered bank, which has dues of around Rs 350 crore, will pursue recovery proceedings which are being led by SBI, the lead lender to Kingfisher. According to information furnished to the finance ministry, the lenders have so far managed to recover a little over Rs 500 crore from the airline, which is now grounded.


Apart from the banks, the airline owes money to Hindustan Petroleum, which supplied fuel, and has allegedly not transferred taxes it had deducted from employee salaries. It also owes money to the service tax wing of the revenue department. Despite several assurances, including by Mallya, employees have not received their salaries.


Read full story: timesofindia.indiatimes.com

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