Kingfisher boss Vijay Mallya targeted in Indian bank debt shake up

With Indian banks struggling to deal with approximately US$120 billion in bad debts, demands from authorities to clean up their balance sheets has seen heightened efforts to recover US$1.40 billion from former carrier Kingfisher Airlines, which ceased operations in October 2012, leaving a string of debts behind it. The airlines debts were guaranteed by the company chief, Vijay Mallya and as a consequence, nine of his company trademarks relating to the carrier have been seized.
India’s Finance Minister, Arun Jaitley, told parliament that every possible action to recover the debt from Mallya and other defaulters will be taken, stating that: “As far as the government is concerned the clear instructions are that the banks must go all out to take every possible action,” while adding that there were a number of instances that were: “wilful default, even bordering fraud”.
However, Malik is understood to have left the country and may currently be staying at his UK residence in Hertfordshire. A spokesperson for Mallya’s company, the UB Group, refused to confirm his whereabouts or to comment on the trademarks’ seizure. A lawyer acting on behalf of the banks seeking to recover the debt has requested the courts demand Mallya’s return to India and for his passport to be seized.
Mallya himself had spoken at the weekend to indicate that he was not avoiding Kingfisher Airlines’ creditors and was currently in negotiations with them regarding a one-time settlement. As far as the seized trademarks are concerned, Harish Bijoor, a brand consultant, was not confident that they would be attractive to buyers, saying: “Who would ever want to run with a label called Kingfisher Airlines?”, adding that recent events were unlikely to have any impact on sales of India’s best-selling beer, Kingfisher, which is owned by Mallya’s UB Group, and which counts Heineken among its major investors.