NEW DELHI, Sep 1: State-owned United Bank of India today became the first lender to declare debt-ridden Kingfisher Airlines, its promoter Vijay Mallya and other directors wilful defaulters as the company allegedly indulged in diversion of funds by opening multiple accounts. “We have declared Vijay Mallya and three other directors of Kingfisher Airlines as wilful defaulters,” UBI Executive Director Deepak Narang told PTI. The other directors declared as wilful defaulters by the Grievance Redressal Committee (GRC) of the bank are Ravi Nedungadi, Anil Kumar Ganguly and Subash Gupte. Kingfisher Airlines and directors declared as wilful defaulters will not be able to borrow from banks in the future. They would also lose Director-level positions in companies and criminal proceeding could be initiated against them, if warranted, to recover the money. Commenting on the development, Financial Services Secretary G S Sandhu said: “Any company in which they are directors, those companies would be affected. The idea is to exclude them from financial sector.” The company had allegedly opened multiple current accounts leading to diversion of funds, said a bank official, adding that there is a balance of Rs 7.5 crore in other-than-the- designated current account as on date. Kingfisher Airlines said: “UBI has post haste proceeded to purportedly declare KFA and its directors or erstwhile directors as wilful defaulters in respect of an overdraft facility of Rs 7.5 crore. “KFA intends to pursue all available legal remedies, including in the Special Leave Petition filed before the the Supreme Court.” Narang said the decision of GRC would be conveyed to the Finance Ministry, Reserve Bank of India, and Securities and Exchange Board of India for their information and action. The GRC meeting was convened today after a Calcutta High Court division bench allowed the bank to initiate the process of declaring them as wilful defaulters last week. The GRC had asked directors to be present before it but no one turned up. The Kolkata-based bank is the first PSU lender to initiate the process of declaring Vijay Mallya and three other directors of the grounded Kingfisher Airlines as wilful defaulters a couple of months ago. The bank had first given notice to declare Kingfisher Airlines as wilful defaulter on May 28. However, the company approached Calcutta High Court against the notice. Single bench dismissed the company’s plea. Subsequently, it approached double bench which upheld the single bench order on August 28. Following this, the bank gave 72-hour notice to the company and its directors which ended today. Other banks such as State Bank of India, IDBI Bank and Punjab National Bank have also initiated the process of declaring KFA and its directors as wilful defaulters. UBI’s exposure to Kingfisher Airlines was around Rs 350 crore as part of consortium led by State Bank of India. The consortium of 17 banks, has an outstanding debt of about Rs 6,521 crore from the now-grounded carrier and outside the consortium, the bank gave about Rs 60 crore loan for Pre-Delivery payment. As part of the recovery process, banks in February last year decided to sell a portion of the collateral with them, including shares of its group companies United Spirits Ltd and Mangalore Chemicals & Fertilizers Ltd, Mallya’s Goa villa, Kingfisher House in Mumbai and the Kingfisher brand, which was valued at over Rs 4,000 crore at the time it was pledged. (PTI)
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