Kingfisher Airlines chief Vijay Mallya has been declared a wilful defaulter by the State Bank of India (SBI) in a letter sent to Mallya late last week – State Bank of India (SBI) is India’s largest lender. What this means is that he and his companies (Kingfisher Airlines and United Breweries Holdings) will not be allowed to raise funds for 5 years. Here are top 4 things to know about Vijay Mallya case:
1. SBI has written that the bank’s grievance redressal committee has considered the legal representation of Vijay Mallya and has rejected it, paving the way for further action.
2. Kingfisher Airlines, which has not flown since 2012, has dues of over Rs 7,000 crore to a consortium of 17 bankers who have been trying to recover their dues by selling securities pledged by the firm. These included real estate and shares in multiple group entities. SBI’s share is estimated to be the largest at around Rs 1,600 crore.
3. According to RBI guidelines, a borrower is termed a wilful defaulter if he has defaulted in meeting the repayment obligations to the lender even when it has the capacity to repay, or has not utilised the money from the lender for the specific purposes for which finance was availed of but has diverted the funds for other purposes.
4. Kingfisher Airlines paper trail:
Aug 2014: SBI sends wilful defaulter notice to KFA
Sep 2014: KFA seeks documents from SBI to substantiate the allegations in notice
Feb 2015: KFA moves Bombay HC to seek legal representation in wilful defaulter hearing
Jun 2015: SBI writes to Vijay Mallya to appear for a personal hearing
Sep 2015: SC allows Mallya’s lawyers to be present at wilful defaulter hearing
Nov 2015: SBI declares Vijay Mallya, United Breweries Holdings Ltd and Kingfisher Airlines wilful defaulters