Former liquor billionaire Vijay Mallya who fled India in March 2016 has been repeating his plea to the Indian government to allow him to pay back about ₹7,000 crore (without interest charges) to the banks.
Mallya’s latest offer came a week ago in a series of tweets. He requested the government to allow him to return the money so that it could be used to treat patients suffering from coronavirus.
Such large-heartedness might bowl one over those who have come in late, but for the Indian government and the various investors, Mallya is the same man who left thousands of his employees literally on the streets when he fled the country one fine evening with a dozen suitcases.
The former owner of India’s largest liquor company, United Spirits, who likes to be addressed as Dr Mallya after he earned a doctorate from a little-known university, a distance-learning online institute in the US, owes a consortium of lenders led by the State Bank of India money worth ₹9,000 crore (about $1.25 billion).
Does Mallya have enough money?
But the truth is Mallya has no money to pay back. He claimed in a court in London that he is living off his children’s money. The former liquor baron who was paid $40 million out of the $75 million by the UK-based Diageo for relinquishing all the posts including that of the chairman of United Spirits later told a court that he had distributed that money to his children.
The stake that he holds in various group of companies in India is all pledged to the lenders and a few other companies. The Enforcement Directorate (ED) has also attached his various properties in the country worth about ₹8,000 crore. Mallya has claimed that if these pledged shares are released, he will sell them off in the market and the money from them will be returned to all the lenders.
Facts that he hides
What he conveniently withholds from everyone is that he raised money from the lenders pledging his shares and used them to buy yachts, a cricket team, an F1 racing team and a few properties though that money was supposed to be invested in Kingfisher Airlines. What he also doesn’t want to tell is that the shares of the Kingfisher Airlines some of which are owned by the lenders are worthless as the money meant for running the airline was wasted on his various indulgences.
As if these delinquencies are not enough, the ED has claimed that they have enough evidence to show that he also made money worth millions through round-tripping. In the case of round-tripping, money leaves the country through inflated invoices and payments to overseas shell companies, but returns to the country through investment in listed entities thereby artificially boosting its stock price. Mallya allegedly bought shares at a lower price and when the price went up because of the round-tripping, sold them off making a handsome pile.
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Mallya also owes money to various entities abroad including Diageo to which he sold of United Spirits in November 2012. He has lost a case against the Swiss Bank, UBS for non-payment of 20.4 million pounds worth mortgages for a 12-bedroom townhouse in London overlooking Regent Park. A court recently allowed him to refinance the property if he pays ₹200 crore to the bank. In another case, Diageo won a $135 million suit against him after it dragged him and his son, Siddharth to court for repayment of $40 million for breach of contract and another $135 million loan that it had refinanced for Mallya’s company, Watson.
Amidst all this, Mallya is fighting an extradition case in the London High Court against the Indian government with the final order expected anytime soon.
What he wants the world to believe
Mallya wants us to believe that it is the Indian government which is at fault for not letting him pay back by allowing him to sell off his pledged shares but the fact is that it is not enough if he pays back. He has violated each and every rule in the book, fudged figures, raised money by showing a higher valuation of his assets, has not paid dues to his airline employees, not deposited the provident fund that his company took from its employees with the government and filed false cases against the lenders to delay payment of the loan. He has also not paid dues to airline leasing companies and oil companies as well.
Added to this, when he ran away to London, he issued a press statement claiming that he wanted to spend time with his children and would return to the country whenever he was needed by courts. Days later, he changed his version claiming that he would not return to the country as he had been made a victim of a political witch hunt and that he had become the poster boy of bank default and a lightning rod of public anger.
He may want us to believe how frustrated he is with the Indian lawmakers but he has bent too many rules to allow himself any kind of redemption.