UB Group chairman Vijay Mallya is in further trouble as state-run United Bank of India...
UB Group chairman Vijay Mallya is in further trouble as state-run United Bank of India on Tuesday identified United Breweries Holdings (UBHL), the guarantor of now-grounded Kingfisher Airlines, a wilful defaulter.
“Our bank has identified United Breweries Holdings a wilful defaulter. The company has the surplus available to repay the loan of Kingfisher Airlines as its guarantor, but it is not paying,” United Bank of India executive director Deepak Narang told FE.
Narang said as per the balance sheet of the financial year 2013-14, UBHL,the parent company of Mallya’s UB Group, had additional resources available and the company could have used it for paying loans given to the airline.
According to him, the present law permits a bank to take actions against a group company if it is a corporate guarantor of a firm tagged ‘wilful defaulter’ and doesn’t pay up when the original party defaults.
The Reserve Bank of India (RBI), in its Master Circular on Wilful Defaulters issued in 2012, said in cases where the guarantees furnished by the companies within the Group on behalf of the wilfully defaulting units are not honoured, when invoked by the banks / FIs, such Group companies should also be reckoned wilful defaulters.
Kolkata-based United Bank became the first lender in the country’s banking industry to declare UB Group chairman Mallya a wilful defaulter.
Cracking down on Kingfisher Airlines for non-payment of over R300-crore outstanding dues, the public sector bank had declared Mallya a “wilful defaulter” in September this year.
The now-grounded airline, however, secured a stay from the Calcutta High Court on the tag. The hearing on the matter is still on in the court and a final verdict is expected in the middle of this month.