The SBI-led consortium of 14 banks have rejected the settlement offer of Rs 14,518.02 crore given by Vijay Mallya’s company United Breweries.
The SBI-led consortium of 14 banks have rejected the settlement offer of Rs 14,518.02 crore given by Vijay Mallya’s company United Breweries (UBHL), saying that the proposal is neither “bona fide”, nor “genuine”, and the liabilities are far in excess of its inflated assets. “In a malicious attempt to inflate the valuation, the Mallya company has included the assets (under the Enforcement Directorate’s attachment) which have been already sold by the banks and duly accounted for, therefore, the calculation is “misleading and exaggerated,” SBI said in its response in the Supreme Court.
The lenders said UBHL is still continuing to show these sold assets as belonging to it/Mallya, thus the liabilities (Rs 12,102 crore) of UBHL are far in excess of its assets (Rs 4,968 crore), SBI said, adding that the total dues payable by UBHL as on date exceeds Rs 15,000 crore.
Refuting UBHL’s claim that it owes only Rs 5,958.97 crore to banks, SBI said the amount due to banks and other creditors as on August 31, 2020, is Rs 11,179 crore and Rs 6,000, respectively. Out of this alleged amount of Rs 14,518 crore, assets worth Rs 2,766.29 crore have already been sold by banks in 2019 and accounted for, thus the amount available is Rs 11,643.20 crore, which is far less than the actual liability.
Further, the attached assets belonging to UBHL are in the range of Rs 1,495.35 crore only as per the ED attachment order, it said. The properties attached by ED are not only of UBHL but also of Mallya and other companies who are not parties in the case.
While offering to settle Rs 14,518-crore liabilities with the consortium and others, UBHL had said that the “bona fide offer” (as on January 17, 2020) “is required to be viewed in the context of the banks having already recovered Rs 2,877.55 crore till date leaving a balance due, at the highest of Rs 5,958.97 crore, given that all the assets of UBHL stood attached” by the ED in June and September 2016.
UBHL had appealed against the Karnataka High Court’s March 6 order that upheld the winding-up order passed in February 2018 for its failure to pay admitted liabilities to unsecured and secured creditors as per the corporate guarantees extended to defunct Kingfisher Airlines.
Mallya and six other companies owned by the family had supported a “robust and bona fide offer” made by UBHL before the HC. However, the lenders said the offer was only to delay the recovery of the dues of the banks by UBHL and its erstwhile management with Mallya at its helm to abuse the process of law who has been already declared a fugitive offender and held guilty of contempt by the apex court for failing to disclose his assets.
“The settlement offers made by UBHL from time to time have not invoked any confidence with the creditors. Even the SC has observed that the settlement offers were only a ploy to gain time… This is a classic example of a wrong doer taking advantage of his own wrong…,” SBI said in its reply filed through its assistant general manager J Parameshwarappa.