The law enforcement agency had issued summons to Vijay Mallya for “personal appearance” on March 18, 2016 under provisions of the Prevention of Money Laundering Act (PMLA). Mallya and Chhagan Bhujbal two big fishes are in legal net for money laundering, one reached behind bars whereas another one is touring around the world. Anyhow, Bhujbal is grabbed without giving any time to him because he was an opposition leader, whereas Mallya is giving tough time to BJP and he became Member of Parliament with BJP’s support. These summons are a damage control act as Mallya deserted the country with the support of the Government. Will the BJP Government auction the properties of other defaulters? Some of the leading corporates owe much larger money than the Mallya. Most of these corporates took loan on fictitious/conjured firms and diverted to other companies, a clear case of money laundering. Unfortunately, these defaulters are sheltered and protected by the BJP Government for their favour to the party. Some of these defaulters are front-runners for takeover of public sector banks. Anything and everything is possible under a pro-rich government! Arun Jaitley has not only failed in bringing back the much promised Black Money but also failed in checking the defaulters.
Vijay Mallya sought time till April for making a personal appearance before the Enforcement Directorate, virtually making it clear that he would not present himself before the anti-money laundering agency pursuant to summons issued by it in the IDBI bank loan default case. The ED had recently registered a money laundering case against Mallya and others based on a CBI FIR registered in 2015. The agency is also investigating the overall financial structure of the now defunct Kingfisher Airlines and will look into any payment of kickbacks to secure loan.
The CBI had booked Mallya, the chairman of Kingfisher Airlines, its directors, former chief financial officer of the airlines A. Raghunathan and unknown officials of the IDBI Bank in its FIR alleged that the loan was sanctioned in violation of norms regarding credit limits. The ED is looking into the “proceeds of crime” that would have been generated using the slush funds of the alleged loan fraud. It is also probing if some of this amount was sent abroad illegally.
Mallya, who is facing legal proceedings for alleged loan defaults by his group to the tune of over Rs. 9,000 crore, the media reports and BJP’s reply to court, was that he has left India. However, through social media he interacted with Indians and said he is not an absconder and he will comply with the law of the land. Even though, Mallya’s words appear to be harmonious, but it’s high time he should pay off his debts to banks and erstwhile Kingfisher employees. He should maintain the dignity of Upper House (Rajya Sabha) as its member. If he could successfully come out from this foreboding situation, he might gain faith of people.
Moreover, he has legal experts’ team with him for taking him out of any situation. He was ‘King of Good Times’ for many upper crust of the society. Mallya has goodwill of others as he brought a lot of things back to India which belongs to us. He has just failed in business of Kingfisher Airlines but he is running other business successfully. United Spirits and United Breweries are tremendous doing superb business. Shareholders, who invested in these companies, are happy that Mallya helmed these and managed their transition to global beverage companies. We cannot blame him and hold only him responsible for the failure of Kingfisher Airlines’ business. This has to be debated in the court and let the court decide his liability in this case.
The key idea of forming a corporation is to protect personal assets and diversify risk among many investors. A clear bankruptcy law is needed to manage the equitable distribution of the remaining assets in a bankrupt business. Mallya owns 1.87% of Kingfisher Airlines. Banks and Indian Financial Institute own 31.68% of the company. Morally, he might be responsible for the messes, but it is the banks that have played the punter here. Public money has literally been thrown down in the gutter. All failures need fall guys and Mallya provides for the best mascot of this failure. If natural justice has to go its course, the decision makers in SBI, BoB, ICICI and IDBI banks must face trial along with Mallya and his core team. The larger institutional stakeholders must be asked to share blame for statutory non – compliances.
Meanwhile, he also sought to shift the blame to the media. Mallya also questioned news reports that ask, he must declare his assets. Too much wrong indulgence of media might shift the focus from main issues. It’s high time; media should publish the development related to the news and stop doing his trial. Mallya may have been the head of UB group and Kingfisher, but the banks and their corrupt managers those who approved loans to Kingfisher Airlines are more responsible for this fiasco. Airlines are a tremendously hard business to make money in, especially with super high fuel prices till 2013 and a very unpredictable policy regime under the UPA government. Further, one person cannot be singled out in a failed business – many people were involved in it. India lacks a clear bankruptcy procedure and it is time to bring that in.
However, if the government can insist on having Board representation in every corporate where there is more than 5% of capital infusion of public money, there may be some gain from this episode?
You cannot call him absconder. Mallya’s principal residence is London. Going back home is not absconding. He is a frequent flyer to India. Though, he possesses an Indian passport, he is a permanent resident of Britain. It is a financial matter. Due to the volatile markets that have caused businesses to experience lack of money flow, he may be finding some difficulty. He only has to convince the courts of his position. In fact, there are hundreds of companies in Britain that are not in a position to repay their debts to their lenders. Many small businesses in India are closing down due to the lack of money flow. Mallya has not reneged to pay his debt. Mallya has promised that he will come back to India to face his creditors. If he refuses to comply with the SC’s orders, then you can call him an absconder. Till then, we should wait and watch, what will happen further.