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Business News/ Companies / People/  Supreme Court directs Vijay Mallya to disclose all assets
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Supreme Court directs Vijay Mallya to disclose all assets

After rejecting Vijay Mallya's debt repayment plan, banks demand that he deposit a substantial amount upfront for any dialogue to commence

The Supreme Court has asked Vijay Mallya to file his reply by 21 April indicating how much he can deposit in the Supreme Court. The next hearing will take place on 26 April. Photo: HTPremium
The Supreme Court has asked Vijay Mallya to file his reply by 21 April indicating how much he can deposit in the Supreme Court. The next hearing will take place on 26 April. Photo: HT

New Delhi: The Supreme Court on Thursday directed UB Group chairman Vijay Mallya to disclose all assets held by him and his family, after a consortium of creditors spurned his offer to repay 4,000 crore to settle the debts of his grounded Kingfisher Airlines Ltd.

The apex court directed Mallya, who has offered to pay an additional 2,000 crore if he wins a pending lawsuit, to disclose all the movable, immovable, tangible and intangible assets owned by him, his wife and children.

The directive came after a consortium of 17 banks led by State Bank of India, which are owed a combined 9,091 crore by Kingfisher Airlines, informed the court that they had unanimously rejected Mallya’s offer but were willing to join negotiations for a settlement.

The banks also demanded that Mallya deposit a substantial amount upfront for any dialogue to commence.

On 30 March, Mallya offered to pay 4,000 crore upfront by end-September and an additional 2,000 crore if he wins a lawsuit filed against a plane engine maker.

A bench comprising justices Kurian Joseph and Rohinton F. Nariman on Thursday also sought clarity on Mallya’s return to India; the businessman took a plane out of the country on 2 March as creditors moved in on him.

“Mallya’s presence in court will accelerate the process (of court hearings)," said advocate Shyam Divan, who appeared on behalf of the banking consortium.

The banks also said a settlement cannot be conditional, referring to Mallya’s offer to pay 2,000 crore if Kingfisher, which was grounded in 2012, were to win a lawsuit.

“If he wants a negotiated settlement, then a token sum must be deposited with the bank as bona fides," Divan said.

The court asked Mallya to file his reply by 21 April indicating how much he can deposit in the Supreme Court. The next hearing will take place on 26 April.

C. Vaidyanathan, Mallya’s lawyer, is expected to file an affidavit on disclosure of assets by 21 April.

Creditor-banks have been seeking a disclosure of all of Mallya’s assets as they seek to recover the loans made to Kingfisher Airlines.

On 11 March, Mallya tweeted: “News reports that I must declare my assets. Does that mean that Banks did not know my assets or look at my Parliamentary disclosures?"

The creditors’ consortium told the court that it was open to future negotiations.

“On Wednesday, Mallya sent a revised offer which we have rejected. But any new offers will be welcome as our intention is to get the money from him," said a lawyer representing one of the banks, who did not want to be identified.

SBI, which has the biggest loan exposure to Kingfisher Airlines at 1,600 crore, and 12 other banks moved the top court a day after a tribunal blocked Mallya from accessing a $75 million (about 515 crore) payout promised to him by Diageo Plc. SBI declared Mallya a wilful defaulter in November last year.

On 25 February, Diageo agreed to pay Mallya $75 million over five years and drop all charges of financial impropriety against him in return for stepping down as chairman of United Spirits Ltd, a company now controlled by the UK liquor maker.

The other creditor banks include Axis Bank Ltd, Bank of Baroda, Corporation Bank, Federal Bank Ltd, IDBI Bank Ltd, Indian Overseas Bank, Jammu and Kashmir Bank Ltd, Punjab and Sind Bank, Punjab National Bank, State Bank of Mysore, UCO Bank and United Bank of India.

On Thursday, the Supreme Court also allowed Oriental Bank of Commerce to become a party to the ongoing case. The bank told the court that it, too, had advanced money to Kingfisher Airlines, without disclosing details.

“It is important to have clarity for the bankers on the schedule of settlement without any riders attached to agree for an out-of-the-court settlement," said Mathew Antony, managing partner at Aditya Consulting, a boutique legal and business advisory firm.

“If there is clarity on this, bankers should be realistic to discount the penal interest and compounded interest components and take a practical mode of recovering the maximum than prolonging an uncertain legal battle with no assurance of physical recovery of the money, though it might achieve a personal imprisonment for Mallya, which still does not resolve the recovery of dues," Antony said.

P.R. Sanjai in Mumbai contributed to this story.

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Published: 07 Apr 2016, 11:37 AM IST
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