Dec 20, 2012 12:04 PM IST | Source: CNBC-TV18

2012 turbulent year for flamboyant Vijay Mallya

It has been a busy 2012 for the aviation space. While some carriers are reeling under heavy losses, others like Indigo are in the pink of health.

It has been a busy 2012 for the aviation space. While some carriers are reeling under heavy losses, others like Indigo are in the pink of health.

2012 also saw the government giving the go ahead for 49% FDI in Indian carriers, but 2012 will also be the year that chairman of the UB group Vijay Mallya would like to forget. The man known for living his life king size had a hard landing.

Successful, powerful and stylish, Vijay Mallya is all that and more. The larger than life chairman of the UB group is known for his wealthy obsessions whether it is India's first F1 team, an IPL team or the famous Kingfisher calendar.

A heady mix of flamboyance and pride reflected in his business life too. Mallya is said to have remarked in the past that he is own brand ambassador and every step taken professionally has kept that in mind.

His aggressive growth strategy via acquisitions came to haunt him in 2012 even though United Spirits, may have become one of the largest spirits companies in the world by volumes and United Breweries made aggressive acquisitions to become the biggest player domestically.

It all started going under for Mallya with the launch of Kingfisher Airlines in 2003 and his subsequent acquisition of Air Deccan. The first indication of trouble came when in 2011, when he announced at his AGM to shareholders stopping low cost operations and placing the airline under a 'holding plan'.

He then started defaulting on salaries to employees for nearly six months. Several rounds of meetings with employees remained unresolved after Mallya indicated he had no money to pay salaries.

 “We are not having any trust because for the last one year he is making so many promises and this has been reflected in the press also that he is not a person to be trustworthy, Subhash Mishra head - Delhi engineers, KFA said.

In the meantime, dues to creditors, from oil marketing companies to AAI to airports kept increasing leading first to a case being filed against KFA by the Mumbai airport over bounced cheques and separately to a non bailable warrant issued by the Hyderabad airport run by GMR to Mallya.

The final straw came when the DGCA suspended KFA's license on October 20th for failing to respond to a show cause notice issued on October 5th. Unless DGCA is satisfied that KFA has the financial as well as saftey problems taken care of, they will not be allowed to fly.  KFA's troubles eroded Mallya's networth and he dropped out of the billionaires club.

He chose to vent his ire on the goings on at the airline at a rather unlikely suspect, the media. His tweeted saying, "I travel 24x7 where my multiple work responsibilities take me. Sections of media call me an absconder because I don't talk to them. You believe that Indian papers have any credibility? There is no libel law in India so there is nothing you can do to bring them to book."

While he has indicated willingness to sell stake in KFA, it remains to be seen how this shrewd negotiator will be able to pull off what is looking like a seemingly impossible task.

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