The Serious Fraud Investigation Office (SFIO), in a probe has found out that the conflict of interest of at least three independent directors on the board of now-defunct Kingfisher Airlines Ltd (KFAL).
The Serious Fraud Investigation Office (SFIO), in a probe has found out that the conflict of interest of at least three independent directors on the board of now-defunct Kingfisher Airlines Ltd (KFAL). According to the report, these directors were promoted by liquor baron Vijay Mallya. According to a report by The Indian Express, SFIO report alleged that certain private companies of three independent board directors of KFAL — G N Bajpai, former chief of Securities and Exchange Board of India; Diwan Arun Nanda, founder of rediff.com; and, Subhash Raghunath Gupte who has been on the board of several listed firms — had a “commercial relationship “ with the airline.
The report said Intuit Consulting Private Ltd, a firm in which Bajpai had interests, “was appointed on a retainer basis to provide management consultancy on competency building, good governance and economy by the UB Group/KFAL”. In the case of Nanda, Rediffusion Dentsu Young & Rubicam Private Limited, Wunderman India Private Limited and Everest Brand Solutions Private Limited — these were firms where Nanda had interests — were handed advertising contracts with KFAL and the UB Group.
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Apart from this, the 157-page report, according to The Indian Express, submitted to the Ministry of Corporate Affairs on August 27, said that liquor baron Vijay Mallya met with a former SBI senior official in 2009 as per the advice of a senior Finance Ministry official, who assured disbursement of a loan of Rs 500 crore from the lender. It stated that freebies to politicians, officials and bureaucrats were used to buying influence and co-opting of independent directors using incentives and contracts.
The report also alleged that Vijay Mallya used outside pressure and intervention for the sanction and disbursement of the corporate loan of Rs 2,000 crore to the now-defunct Kingfisher Airlines Ltd.