Bengaluru: The Debt Recovery Tribunal in Bengaluru on Tuesday advised the State Bank of India (SBI) to explore the option of adjusting the Rs.2,000 crore deposited by United Breweries chairman Vijay Mallya in the Karnataka high court against the amount owed by his companies to banks.
The tribunal was hearing a case where a consortium led by SBI, India’s largest lender, is trying to recover unpaid dues of Rs.9,000 crore from indebted businessman Mallya and his associate companies.
The DRT suggested the lender consortium adjust Rs.2,000 crore against the outstanding amount in order to bring down the non performing assets and interest dues on behalf of the associate companies of business tycoon Mallya.
If this can be done, then both sides will benefit, the tribunal said.
Last week, Mallya-controlled Kingfisher Airlines Ltd and United Breweries (Holdings) Ltd had filed objections against allegations made by SBI before the tribunal. The tribunal asked all related parties to decide and let it know which applications should be heard on a priority basis for speedy resolution of the case.
On Tuesday, the tribunal adjourned the case to 13 June to facilitate hearing on the preference of related parties.
The hearing includes the matter of an ex-parte interim order passed by the DRT on 17 May, asking JP Morgan Chase Bank (North America) not to disburse an amount of $40 million that has been paid out by Diageo Plc to Mallya. The $40 million was part of a $75 million sweetheart deal that Mallya got for stepping down as chairman of United Spirits on 25 February.
However, Mallya’s legal team has approached the Karnataka high court, challenging the DRT order restricting the payout.
In 2013, SBI moved a petition against Mallya, who owes more than Rs.9,000 crore to banks in loans and interest taken for his Kingfisher Airlines. The airline, which made heavy losses and piled up debt since inception in 2005 was finally grounded in 2013.
The case gathered steam after Mallya’s $75 million deal in February. SBI filed four interlocutory applications on 2 March seeking Mallya’s arrest, impounding of his passport, disclosure of all assets and liabilities and stopping the $75 million payout by Diageo, Mint reported on 2 March.
On the same day, Mallya left for the UK where he continues to live. In an interview to the Financial Times on 29 April, Mallya said he was in “forced exile” and that reporting by the Indian media had turned public opinion against him.