UCO Bank shoots off letters to KFA, United Breweries on wilful default

Written by fe Bureau | Kolkata | Updated: Nov 1 2014, 05:51am hrs
Public sector lender UCO Bank, which has already identified Kingfisher Airlines (KFA) and its corporate guarantor United Breweries Holdings (UBHL) as wilful defaulters,

shot off letters on Friday to both the firms, asking them to explain why they should not be declared as wilful defaulters.

The grounded carrier and UB Holdings, which is the parent company of Vijay Mallyas UB Group, would have 15 days from receiving the letter to explain their positions, a source in the bank told FE.

Earlier, the lender said it was in the process of identifying Kingfisher Airlines as a wilful defaulter for non-payment of about R300-crore outstanding dues.

United Bank of India was the first bank to declare Kingfisher Airlines chairman Mallya and three other directors of the airline as wilful defaulters. Later, the company secured a stay from the Calcutta High Court on declaring the airline and its directors as wilful defaulters. The court has directed the bank to file its affidavit-in-opposition by November 3.

United Bank had also served notice to UB Holdings, asking it to explain why it should not also be declared as a wilful defaulter as it was the guarantor for the loan given to the airline.