1. Vijay Mallya was using Kingfisher Jet purchased for air services for personal use: SFIO Report

Vijay Mallya was using Kingfisher Jet purchased for air services for personal use: SFIO Report

It seems like Kingfisher chairman Vijay Mallya enjoyed good times through the fraudulent ways. In the latest revelation, a probe by the Serious Fraud Investigation Office (SFIO) has found that Kingfisher Airlines Ltd (KFAL) purchased an Airbus corporate jet A319-100 for non-scheduled air transport services operation in November 2006 but it was allegedly diverted for personal use of Vijay Mallya

By: | New Delhi | Published: October 8, 2017 10:42 AM
Vijay Mallya jet purchase, vijay mallya, Kingfisher, news, latest news, India news Vijay Mallya (SOURCE: PTI)

It seems like Kingfisher chairman Vijay Mallya enjoyed good times through the fraudulent ways. In the latest revelation, a probe by the Serious Fraud Investigation Office (SFIO) has found that Kingfisher Airlines Ltd (KFAL) purchased an Airbus corporate jet A319-100 for non-scheduled air transport services operation in November 2006 but it was allegedly diverted for personal use of Vijay Mallya, his family members, as well as his political and personal friends. The SFIO also pointed out that the jet was purchased at a time when the financial position of the airline was “precarious” and “the entire share capital including reserves was completely eroded”.
KFAL applied in February 2006 to the Ministry of Civil Aviation (MOCA), seeking a no-objection-certificate (NOC) for import of a jet, now registered as VT-VJM. But the airline, the SFIO found, also applied to the MOCA for a separate NOC to use the same jet for overseas travel of Mallya, and for “VVIP tourism and chartered trips to various destinations world over”. The NOC was also sought on the ground that surplus income would be generated from operations of the corporate jet.

As per the SFIO report, Kingfisher managed the purchase through a financial lease agreement with a firm in the Cayman Islands. The report further said that Kingfisher capitalised the purchase cost of Rs 293.2 crore in its books. It also booked the lease interest, lease rentals and operational expenses. However, the jet “was never used” for non-scheduled air transport passenger services, as claimed before the Directorate General of Civil Aviation (DGCA) and MOCA but was mainly used as a personal carrier for Mallya, as per the report.

“It was extensively used by the family members as well as political and personal friends of VJM (Vijay Mallya) as evidenced by the passenger manifest of this aircraft provided by Airports Authority of India (AAI), Western Region, Mumbai vide its letter dated 15.09.2016 for some dates during 2007 to 2010,” the SFIO report stated. It said that Kingfisher did not raise any invoice to recover expenses for Mallya’s travels when he did so on account of work related to other UB Group firms.

The SFIO has charged Mallya, United Breweries (Holdings) Limited (UBHL) and a few top officials of Kingfisher under section 542 of the Companies Act 1956 which fixes liability on individuals and entities for fraudulent conduct of business. It has also referred the case to the Central Board of Excise and Customs (CBEC) for “recovery of tax dues from the promoter directors of KFAL as their personal liability in view of fraudulent conduct of business” and “in respect of any concessions passed and recovery of the duty forgone” for the jet as a “chartered services aircraft which was used as a personal carrier”.

Currently, the jet VT-VJM is in the custody of the Service Tax department. The Bombay High Court has approved for the auction of the jet but the Service Tax department has not been able to sell it due to un-satisfactory bid.

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