Capt G.R. Gopinath started India’s first budget airline Air Deccan, which he sold in 2007 to Vijay Mallya. Gopinath has had his disagreements with the tycoon over the airline’s famed low-cost business model before parting ways. “It’s not in good taste to hit a guy when he’s down, whatever may be the faults,” he tells Outlook. Edited excerpts from his conversation with Ajay Sukumaran:
How do you see the Kingfisher fiasco?
The basic fact has been mistakes...imprudent decisions...bad decisions, it could be various things. There are two issues, one is bad business decisions and the other one is an investigation into an allegation of fraud. The investigation should go on and people should not prejudge the situation. The investigation was ordered over a year ago and whether there is a fraud or not, only an investigation can tell you.
The kind of hounding by the media has probably driven him out of the country. The way it is being put out is that Vijay Mallya has defaulted and defrauded on the whole money and run away.
Has not the narrative gone beyond Kingfisher now?
What the whole country is missing is that fraud by anybody is punishable, whether by a businessman, a politician or a journalist. It has to be investigated. If investigative agencies are independent of political parties, then a lot of people won’t ask the kind of questions they are asking: why did you allow him to get away?
In India, we have to get our institutional autonomy back. The second thing is the Mallya issue is drawing a lot of attention because he also brought it upon himself. It’s more an issue of sensibilities and sensitivity. Let’s say you pay your income taxes and don’t owe money to anybody but have a big flashy wedding when there is a famine. You know, it doesn’t create the right feeling. Especially so when there are issues of not having paid some tax or salaries. In a sense, Vijay Mallya has been unwise flaunting his lifestyle.
The other point is in India, you mistake the company for the individual. Kingfisher is not Mallya, Mallya is not Kingfisher.
Why do you feel it’s a systemic failure?
Because the board has obviously failed, in a sense it was overawed by Mallya like everybody else.
The second thing is the government also failed in a way in doing whatever it could to save Kingfisher Airlines from collapse. Actually, they were looking at Vijay Mallya, they were not looking at the company. The government ensured that Mallya collapsed. The government dilly-dallied over allowing FDI by airlines in the aviation sector for two years when Mallya was begging for it and his competitors were lobbying against it. And allowed it immediately after Kingfisher Airlines collapsed. The same competitor then went to bed with a foreign airline the moment Kingfisher collapsed.
I think the focus should have been on saving the airline and not punishing it for the sins of the promoter, if there were sins. With that kind of debt, no private equity or individual would come forward, only a strategic investor will. He had already spoken to foreign airlines and they were ready. They could have saved the airline and jobs and still gone after Mallya for the balance debt and prosecuted him for recovery of dues.