Vijay Mallya hits out at IBC, slams ‘up to 95% haircuts’ in corporate bad loan recovery

Taking a jibe at the Insolvency and Bankruptcy Code (IBC), fugitive liquor baron Vijay Mallya posted a 'great haircut story' on social media platform X.

While crying foul over his case, Vijay Mallya claimed that banks recovered more money from him than he owed and pointed out that other corporate bad loan cases — including Bhushan Steel, DHFL, Alok Industries and ABC Shipyard — were resolved with up to a 95 per cent haircut, resulting in major losses to banks. According to Mallya, “banks recovered in excess of ₹14,000 crore against a judgment debt of ₹6,203 crore.” 

Slamming the case pertaining to Sivasankaran Industries, Mallya posted, "Last one best. Father in law acquires it after 95% haircut [sic]".

For the uninitiated, a haircut under IBC is the difference between creditors' claims and the amount received during the insolvency resolution process.

According to data shared by Mallya, creditors transferred control of the company to founder Sivasankaran's father-in-law for ₹320 crore despite total dues amounting to ₹4,800 crore.

Vijay Mallya's claim

Vijay Mallya has repeatedly claimed that banks have recovered more from him than he owed. 

In another post on X, he wrote, “And in my case, Banks recovered in excess of ₹14,000 crores against a judgement debt of 6203 crores [sic]."

Vijay Mallya approaches Karnataka High Court

In February, Vijay Mallya approached the Karnataka High Court seeking clarity on the banks' loan recovery process. Nearly ₹6,200 crore was to be repaid, but ₹14,000 crore had already been recovered, Mallya's counsel claimed, reported ANI.

He also asked the Enforcement Directorate to legally justify how they have recovered more than two times the debt.

"The Debt Recovery Tribunal adjudged the KFA (Kingfisher Airlines) debt at ₹6203 crores including ₹1200 crores of interest. The FM announced in Parliament that through the ED, Banks have recovered ₹14,131.60 crores from me against the judgement debt of ₹6203 crores and I am still am an economic offender. Unless the ED and Banks can legally justify how they have taken more than two times the debt, I am entitled to relief which I will pursue [sic]," Mallya said in an X post.

The case revolves around the loan defaults and legal battles surrounding the now-defunct Kingfisher Airlines, owned by Vijay Mallya, who is accused of being a willful defaulter.