banking-finance News


Supreme Court Summons Vijay Mallya in Loan Default Case

... Editorial Team

The Supreme Court has asked Vijay Mallya to be present before it on March 30, with his passport, after it was informed by the Govt Counsel that the liquor baron had already left the country.  Attorney General (AG) Mukul Rohatgi told the Bench of Justice Kurian Joseph and Justice R F Nariman that Mallya had left the country, possibly for the UK, on March 2 — the day the banks had appealed against him at the Debt Recovery Tribunal (DRT). The matter came up in the Supreme court after a consortium of banks  moved the court seeking the freezing of his passport.

Mallya, the chairman of the UB Group and a Rajya Sabha member, is facing legal proceedings for allegedly defaulting on loans of Rs 9,000 crore.

The consortium of banks, in their appeal, has appealed against the March 4 order of the Karnataka High Court refusing an “ex-parte ad interim” order — preventing the defendant from selling their assets — against Mallya, England-based Diageo Plc and the United Spirits Limited.The banks said that the high court should have passed an interim order, securing their financial interests. Prior to moving the high court, the banks had filed pleas with the Debt Recovery Tribunal in Bengaluru, seeking the freezing of Mallya’s passport, issuance of an arrest warrant against him and a “garnishee order” Diageo Plc and United Spirits Limited from disbursing $75 million (about Rs 500 crore) to Mallya — as agreed upon in his exit settlement.

The banks have sought a direction to Mallya to “furnish suitable security for his appearance before the DRT” during the pendency of banks’ original applications for recovering debts.They have also arraigned firms such as Kingfisher Airlines Ltd, United Breweries (Holdings) Ltd, Kingfisher Finvest (India) Ltd, SBICAP Trustee Company Ltd as parties. The plea said the banks “individually” had advanced loans to Kingfisher Airlines Limited and by way of a Master Debts Recast Agreement (MDRA), executed on December 21, 2010, and related documents, the existing loans were restructured and was treated as a single facility.           

Source: Reuters, Business Standard