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Vijay Mallya: The King of Willful Default!
After all the talk on corporate governance and a value based business model comes another shameful accolade for the liquor baron who was once known in corporate circles as a dashing ambassador of style .
The Declaration by United Bank of India
State-run United Bank of India on Monday became the first lender to declare debt-ridden Kingfisher Airlines and its promoter Vijay Mallya as willful defaulters. The Grievance Redressal Committee (GRC) of the bank has declared directors Ravi Nedungadi, Anil Kumar Ganguly and Subash Gupte as willful defaulters.Mr. Narang said the decision of GRC would be conveyed to the Finance Ministry, Reserve Bank of India, and Securities and Exchange Board of India for their information and action.The GRC meeting was convened today after a Calcutta High Court division bench allowed the bank to initiate the process of declaring them as willful defaulters last week.
What Does This Declaration Mean for KFA?
The GRC had asked directors to be present before it but no one turned up. Instead, they had sent a letter through their lawyer stating that they had filed a Public Interest Litigation (PIL) in Supreme Court and pending the judgment the bank should not proceed in this regard.The Kolkata-based bank is the first PSU lender to initiate the process of declaring Vijay Mallya and three other directors of the grounded Kingfisher Airlines as willful defaulters a couple of months ago.Subsequently, other banks such as State Bank of India, IDBI Bank and Punjab National Bank have also initiated the process of declaring KFA and its directors as willful defaulters.The bank’s exposure to Kingfisher Airlines was around Rs. 350 crore as part of consortium led by State Bank of India.
Post this declaration, these persons and the entity would not be able to borrow from the bank in future. They would also lose Director-level positions in companies. Criminal proceeding could also be initiated against these persons if warranted.