Mallya to Pursue Legal Action Against 'Wilful Defaulter' Tag
As lenders mount pressure on him for repayment of debts, liquor baron Vijay Mallya today said he will challenge a bank's decision to declare him and his now shut Kingfisher Airlines a willful defaulter saying he was never heard before pronouncement of the decision.
United Bank of India on Monday declared Mallya, 58, and three directors of Kingfisher Airlines willful defaulters, a tag that would restrict them from seeking future loans and also force him to step down from directorships.
"We were not given hearing, we have not appeared before them, we disagree with their action, and we shall pursue with legal remedies," he said here.
Kingfisher Airline did not make any profit during the eight years from launch to the grounding of its fleet in October 2012.
Speaking to reporters on the sidelines of 15th Annual General Meeting (AGM) United Breweries Ltd, he said, "we shall pursue all available legal remedies. I have great faith in judicial system in our country and I shall certainly pursue the legal remedies that are available to me."
Mallya is the chairman of United Breweries, producer of India's best-selling beer brand Kingfisher. He is also the chairman of United Spirits, now controlled by Diageo Plc.
"In response to the United Bank of India action, I have already issued a media statement which basically says that we strongly deny the allegations made, that we disagree with the findings of their Grievance Redressal Committee before which we have had no opportunity to appear," he said.
Besides United Bank of India, Kingfisher owes about Rs 9,140 crore to about a dozen banks. Of them, IDBI Bank is considering declaring Mallya a willful defaulter and is serving
out its 15-day notice period on non-payment of dues.
Kingfisher owes Rs 750 crore to IDBI Bank. It owed Rs 450 crore to United Bank.
Asked about reports of action by other banks, Mallya said, "Frankly, whatever the news reports may be subsequently concerning other banks, there is no point in indulging in speculation. We will take each one as it comes."
The Reserve Bank of India defines a willful defaulter as a borrower that is able but unwilling to pay, has diverted loan proceeds for other than their initially stated use or has overstated profits to obtain a loan.
Asked about UBI Executive Director's statement that UB group was given time to present their case, Mallya said: "I cannot get into media debate on what the United Bank of India Executive Director has said. .... We were not given hearing, we have not appeared before them, we disagree with their action, and we shall pursue with legal remedies."
To a question on the stance Heineken and Diageo might take on his board position because willful defaulter means board position becomes untenable, Mallya said: "You should ask that question to both Heineken and Diageo directly; these issues have not been raised with me."
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