​​​
  1. Writing off Vijay Mallya led Kingfisher airlines dues to BIAL untenable: CAG

Writing off Vijay Mallya led Kingfisher airlines dues to BIAL untenable: CAG

Now defund Vijay Mallya's Kingfisher airline: The CAG termed a request from the Bangalore airport operator to the government to waive more than Rs 9 crore owed by the now-defunct Kingfisher Airlines as "untenable" and an "undue favour".

By: | New Delhi | Updated: July 21, 2017 11:58 PM
Kingfisher, BIAL, untenable, Auditor General, Bangalore airport operator, undue favour, now-defunct Kingfisher Airlines, civil aviation BIAL also has to ensure realisation of dues from airlines regularly and furnish copies of audited accounts to MoCA. (Image: PTI)

Now defund Vijay Mallya’s Kingfisher airlines: The Comptroller and Auditor General today termed a request from the Bangalore airport operator to the government to waive more than Rs 9 crore owed by the now-defunct Kingfisher Airlines as “untenable” and an “undue favour”. The CAG also censured the government for failing to ensure that the airport operator recovered over Rs 17 crore from various airlines. According to a concession agreement between the ministry of civil aviation (MoCA) and Bangalore International Airport Limited (BIAL), the latter collects a security fee or passenger service fee through various airlines. This fee is deposited in an escrow account. BIAL also has to ensure realisation of dues from airlines regularly and furnish copies of audited accounts to MoCA.

However, as per the CAG report submitted today, as of March 2014, the amount outstanding from various airlines was at Rs 16.77 crore, which increased to Rs 17.44 crore by March, 2016. Of the Rs 17.44 crore, Kingfisher Airlines owed more than half the amount at Rs 9.19 crore.

The CAG report also says that BIAL’s request in 2014 for writing off the dues recoverable from Kingfisher is “not tenable” and would be an “undue favour” to the defaulter and would be a “condonation” of BIAL’s failure. It added that as there was no provision for imposing a penalty on an airline for non-payment, inability to recover dues constituted an “interest-free loan” to Kingfisher Airlines.

“The ministry failed to ensure that BIAL fulfilled its fiduciary duty to promptly realise the security fees from the airlines and deposit the same in escrow account. As a result, outstanding dues against airlines accumulated and recovery of Rs 9.19 crore from Kingfisher was rendered doubtful,” said the report.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

  1. No Comments.

Go to Top