No laxity dealing with Vijay Mallya and Kingfisher Airlines, says SBI

Last Updated: Fri, Sep 14, 2018 18:05 hrs
Vijay Mallya

Public enterprise State Bank of India came out with a two line quote clearing it's stand involving on-the-run Vijay Mallya.

According to a latest report, the liquor baron left the country on March 2, 2016, however the State Bank of India and 13 other banks with significant exposure to Mallya moved the apex court four days later to seek the court's intervention in prevent Mallya from leaving the country.

This, the unverified report said may have been owing to a laxity on the State Bank's part.

"State Bank of India (SBI) denies that there has been any laxity on its part or its officials in dealing with loan default cases, including kingfisher Airlines. Bank has been taking proactive and strong measures to recover the defaulted amounts," the lead bank said in a statement.

Mallya's total loans are estimated at Rs 9000 crores involving a consortium of 17 banks.

In an open letter, the man once famous for throwing lavish parties defended himself, saying that the SBI and other banks had lent him money despite knowing about his company's financial situation. In fact his lawyers cited emails being exchanged with officials at IDBI bank to suggest that the bankers had sufficient knowledge of his financial status.

Mallya also claimed that he was being made the poster boy for bank defaults, but banks were also culpable.

The Supreme Court had raised some unsavoury questions to the banks that approached. It wondered why loans were given to Mallya when he was already a defaulter and was facing proceedings in the court of law.

It is to be noted that he had already announced his intention to shift to the UK in a statement issued after his deal with Diageo to step down from the chairmanship of United Spirits, a company he sold to the UK major three years back. He was to get Rs 515 crores or $75 million from Diageo as a "severance package".

SBI had in the first week of March 2016 moved the Debt Recovery Tribunal in Bangalore claiming the first right on the payment by Diageo to Mallya and seeking to impound passport.

However, the DRT reserved its order and set the next hearing for March 28, 2016, a good 21 days later.