While Vijay Mallya relaxed tweeting on Friday, blaming the media trial for his woes, his officials faced the heat with the Enforcement Directorate (ED).
The ED has asked Mallya to appear before it on March 18. Mallya's lawyers, in the meantime, have informed the Central Bureau of Investigation (CBI) that he will return to India by month-end.
Mallya tweeted without disclosing his location: "I am an international businessman. I travel to and from India frequently. I did not flee from India and neither am I an absconder. Rubbish."
The investigating agencies, which woke up quite late, are trying to establish if there is any connivance between bankers and Mallya as the loans they allege were not sufficiently backed by collateral.
Bankers from IDBI Bank are also expected to be questioned as to why sanctions were approved for the airline when the company had a negative net worth in 2009. It was the same year Mallya emerged as a surprise bidder spending $1.8 million to buy Mahatma Gandhi's personal belongings at an auction in New York.
In another tweet, he said: "As an Indian MP, I fully respect and will comply with the law of the land. Our judicial system is sound and respected. But no trial by media." In a veiled threat to the media, he added: "Let media bosses not forget help, favours, accommodation that I have provided over several years which are documented. "
Amidst the war cry against Mallya, can the Kingfisher loans be termed as a fraud? The CBI says that it has not found anything criminal in the financial transactions of Mallya and the agency is still to establish the money trail – that is if bank loans have flown to tax havens.
The ED is exploring various angles like money-laundering. "From 2004 to 2008, Kingfisher was a top airline in the country, which everyone loved to travel in. So the bank loans went largely into the business, or else how did the airline run even if it were on leased aircraft? Credit is often sanctioned on projections and the government at that time was also asking bankers to support the airline sector," said a senior banker in the 17-bank consortium, led by SBI.
Senior bankers in the consortium say "whatever pressure that Mallya is facing today is due to the concerted action by the banking consortium, with litigations in various courts. Government agencies like the tax department was not taking coordinated efforts. Time and again, Mallya managed to get injunctions from the court favouring him as there were many lacunae in the legal system. Investigating agencies have found nothing or, at least, they have not communicated anything to us."
When banks were close to taking over the Kingfisher House in Mumbai, the sales tax department filed a case asking for a share and then banks and the sales tax department had to make a joint sales committee to decide on the sharing of the proceeds.
The Kolkata-based United Bank of India was the first to call Kingfisher a wilful defaulter in 2014. But Mallya approached the Kolkata High Court and got a stay on calling him a wilful defaulter on technical grounds.
In its 2012-13 annual report, Kingfisher said that, at its peak, it was the largest airline in India with a five-star rating from Skytrax. A brand valuation consultancy firm Grant Thornton puts its value at $550 million, which is Rs 3,000 crore on resumption of operations. The airline's brand has been registered separately from the Kingfisher beer trade mark.
Namo Narain Meena, then minister of state for finance, had written told Parliament in 2011 that the company had to hypothecate the Kingfisher brand to banks with an estimated value of Rs 4,100 crore. The evaluation was done by Grant Thornton.
The other securities that were given by Mallya, the then chairman of Kingfisher, was a personal guarantee of Rs 248.97 crore, while United Breweries Holdings, which he heads, provided a corporate guarantee of Rs 1,601.43 crore.
In addition, Kingfisher provided a pooled collateral security of Rs 5,238.59 crore, which includes the Kingfisher House in Mumbai, Kingfisher Villa (Goa), and helicopters.
Besides, the pledged securities include ground support and other equipment (Rs 101.58 crore), computers (Rs 22.43 crore), office equipment (Rs 13.39 crore), furniture and fixtures (Rs 33.35 crore) and an aircraft (Rs 107.77 crore)
Zee Business reported that the Serious Fraud Investigation Office (SFIO) is planning to step up its investigation against Mallya and have asked him to appear before it for questioning in the next 15 days when Vijay Mallya and his directors will be cross-examined. An SFIO official told Zee Business that Kingfisher not only diverted bank loans but also failed to repay loans taken from other companies.
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