Banks moving to get Kingfisher, Mallya declared wilful defaulters
24 July 2014
In a further setback to the failed Kingfisher Airlines and its promoter Vijay Mallya, a senior government official said today that several lender banks have initiated the process of declaring the airline a wilful defaulter.
''Some banks have already started the process,'' financial services secretary G S Sandhu told newspersons in Delhi when asked whether the banks are going to declare Kingfisher Airlines and its promoter Vijay Mallya as wilful defaulter.
This means that liquor baron Vijay Mallya could face criminal charges, besides being debarred from setting up new ventures for five years or raising money from financial institutions.
Kingfisher Airlines owes about Rs4,022 crore to a consortium of 17 lenders, mainly state-owned banks led by State Bank of India, which is among those that have started default proceedings.
''This (declaring the company a wilful defaulter) would be done by banks and it would be their individual decision,'' Sandhu said.
Under Reserve Bank of India rules, it would have to be proved that the borrower had diverted funds which he taken from the bank to other purposes, and not paying up despite having the ability to pay.
Kolkata-based United Bank of India was the first PSU lender to initiate the process of declaring Vijay Mallya and three other directors on the grounded Kingfisher Airlines as wilful defaulter.
The consortium led by SBI has also initiated the process of recovery.