Vijay Mallya's is a fall that is both tragic and symptomatic of the excesses of our times.
The king of good times is now a fugitive businessman and there may be a Bollywood script somewhere coming together to sum up the rather incredible riches to ignominy tale of Vijay Mallya.
This is a fall that is both tragic and symptomatic of the excesses of our times.
A story that we will try and sum up in this Money Control Deep Dive
The latest developments first.
As is common knowledge, Mallya remains on bail on an extradition warrant that was executed by the Scotland Yard last year on fraud and money laundering charges. On December 10, a ruling at the end of Mallya's extradition trial is expected at Westminster Magistrates' Court in London.
And on December 6, Asian News International reported that the liquor baron who is in the United Kingdom after India initiated extradition proceedings against him, has reiterated his wish to repay banks completely.
The 62-year-old, once again, refuted reports of any connection between his proposed settlement offer and the upcoming ruling in his extradition trial. He refuted the suggestion that his offer was triggered by the extradition of Christian Michel, the alleged middleman in the AgustaWestland chopper deal, who was brought back to India on Tuesday.
He tweeted and we quote, "Respectfully to all commentators, I cannot understand how my extradition decision or the recent extradition from Dubai and my settlement offer are linked in any way. Wherever I am physically, my appeal is "Please take the money". I want to stop the narrative that I stole money." Unquote
Trying to explain the failure of Kingfisher Airlines, he tweeted, "The Airlines struggled financially partly because of high ATF (aviation turbine fuel ) prices. Kingfisher was a fab airline that faced the highest ever crude prices of $ 140/barrel. Losses mounted and that's where Banks money went. I have offered to repay 100 percent of the Principal amount to them. Please take it." Unquote.
Another tweet repeated, "For three decades running India's largest alcoholic beverage group, we contributed thousands of crores to the State exchequers. Kingfisher Airlines also contributed handsomely to the States. Sad loss of the finest Airline but still I offer to pay Banks so no loss. Please take it." Unquote.
You will remember that last month, a special Prevention of Money Laundering Act (PMLA) court had rejected Mallya's plea seeking a stay on hearing of Enforcement Directorate's (ED) application to declare him a fugitive.
ANI reported that the decision from the judicature came after five parties, including a family member of Mallya, sought court dossiers with regard to the ED seeking to get Mallya declared a fugitive economic offender under the new law. Both ED and the Central Bureau of Investigation (CBI) have filed several cases for alleged loan default against him.
Mallya has been residing in the UK from the past two years and his extradition case is reportedly in its final stage.
Mallya had earlier claimed that he had made two settlement offers to banks.
In September, he had stated that he had a made a “comprehensive settlement” offer before the Karnataka high court back in June, which according to him was ignored.
He had tweeted, “Politicians and media are constantly talking loudly about my being a defaulter who has run away with PSU bank money. All this is false. Why don’t I get fair treatment and the same loud noise about my comprehensive settlement offer before the Karnataka high court. Sad." Unquote.
Point to be noted is though Mallya has offered “the principal amount and not the interest.
In June 2017, the Directorate of Enforcement filed a chargehseet under the Prevention of Money Laundering Act (PMLA) alleging that Mallya fled to the UK on 2 March 2016 to escape the consortium of 13 banks, led by the State Bank of India to whom, he owes Rs 9,000 crore. ED had also pushed to confiscate all his properties to the tune of Rs 12,500 crore.
India had formally asked for his extradition in February last year.
Mallya has been proclaiming his innocence via his team of legal eagles, tweets and he also wrote a letter to the PMO earlier this year, saying that though he was "making every effort" to settle his dues to banks, he had been made the "Poster Boy" of bank default and a lightning rod for public anger.
He has maintained throughout that he is not a fugitive and this November, Mallya's lawyer Amit Desai had said that Mallya had left the country in normal course. And that he is a non-resident Indian (NRI) with a permanent address in London and he had substantial businesses overseas as well as in India.
The idea was to refute the notion that Mallya had left the country under suspicious circumstances as claimed by investigating agencies.
Advocate Desai had also said that Mallya had cooperated with the Debts Recovery Tribunal in its proceedings.
Desai had also stated that Mallya had been one of the owners of Force India, a Formula One team, and he had left the country for London on March 2, 2016 via Germany, where he attended a conference of World Motorsports as a director.
He also said that The Fugitive Economic Offenders Act is a draconian law as it permits confiscation of a person's property even before the trial starts. He had said, “As per the criminal procedure, property is confiscated only after the accused is held guilty. Under this law, the question of confiscation of property comes even before the first witness is examined.” Unquote.
The back story
Nothing in Vijay Vittal Mallya’s life story could have predicted the present state of affairs. He was after all the son of businessman Vittal Mallya, the chairman of United Spirits, the largest spirits company in India and the force behind the United Breweries Group, a sprawling conglomerate with interests including beverages, aviation infrastructure, real estate and fertilizers.
He has also been the chairman of Sanofi India (previously known as Hoechst AG and Aventis) and the chairman of Bayer CropScience in India for over 20 years, and the chairman of several other companies.
Mallaya was just 28 when he became the Chairman of United Breweries Group in 1983 and then oversaw its expansion as an international conglomerate of over 60 companies, with an annual turnover which increased under his watch by 64 percent over 15 years to US$11 billion in 1998–1999.
One of his special skills was the consolidation of disparate corporate entities under the umbrella of "UB Group” by focusing on the core profitability of alcoholic beverages. Another strength was acquisition and as time went by, he acquired, brands like Berger Paints, Best and Crompton, and Mangalore Chemicals and Fertilisers. Not to forget, Asian Age newspaper and film glossy Cine Blitz.
United's Kingfisher beer has had a huge presence in pop culture and it commands over a 50 percent market share in the domestic beer market. Internationally, it is available in 52 countries and is a leader among Indian beers.
Momentous events like United Spirits Ltd celebrating the sale of 10 crore cases and becoming the second-largest spirits company in the world by volume, were de rigueur as for a while whatever Mallya touched, turned into gold.
He was even elected to the Rajya Sabha in 2002 as an independent member from Karnataka with the support of the BJP party and Janata Dal.This was a fearlessly flamboyant figure with the aspiration levels of a Richard Branson and the face of a brashly confident India and when he launched a domestic airline, it was bound to unlike any other.
He was the toast of celebrity events, almost as famous as a film star and enjoyed media attention and a jet-setting life-style.
Mallya established Kingfisher Airlines, in 2005 amid much fanfare but something somewhere was beginning to go wrong. Because the golden touch Mallya was famous for failed to protect the company from insolvency.
By October 2013, it became common knowledge that the company had not paid salaries to its employees for 15 months, had lost its licence to operate as an airline, and owed more than US$1 billion in bank loans. Among the banks Mallya owes dues to are SBI, BOB, Corporation Bank, Federal Bank Ltd, IDBI Bank, Indian Overseas Bank, J&K Bank, Punjab and Sind Bank, PNB, State Bank of Mysore, UCO Bank, UBI and JM Financial Asset Reconstruction Co. Pvt Ltd.
By November 2015, as multiple news sources have reported, the amount owed to the banks had grown to over $1.35 billion and the mountainous debt was growing by the moment.
Accusations of money laundering and more had caught up decisively with Mallya. In February 2015, he was forced to resign as Chairman of United Spirits. And his severance payment of $75 million was blocked by the courts in India.
A timeline of ignominy
As reported by multiple new sources, by March 2016, a consortium of banks had approached the Supreme Court of India to stop Mallya from going abroad but by then he had already left the country that had both given him immense success and where he finally lost his face and his fortune. He is also facing allegations that he transferred Rs 4,000 crore (US$560 million) to tax havens.
On 13 March 2016, a court in Hyderabad issued a non-bailable warrant for Mallya's arrest, while he remained at his country estate near London, England.
On 18 April 2016, a special court in Mumbai also issued an undated non-bailable Arrest warrant against him in response to a plea by the Enforcement Directorate on 15 April before the special court hearing cases under the Prevention of Money Laundering Act, 2002.
On 11 June 2016, the Enforcement Directorate reported it had "provisionally attached" Rs 1,411 crore rupees worth of Mallya's Indian assets and properties against unpaid loans totaling Rs 807 crore.
On 3 September, a second attachment order was issued for a further Rs 6,630 crore worth of Mallya's assets, including a farmhouse, shares in United Breweries and multiple flats in Bengaluru valued at Rs 565 crore.
By December 2016, the ED has attached a total of Rs 9661 crore worth of assets of Mallya and Kingfisher in India.
Mallya has frequently proclaimed from the cool climes of UK, “shock” and dismay at the treatment meted out to him and has maintained that he left India to be closer to his children.
Just to refresh your memory, a group of 17 Indian banks are trying to collect approximately Rs 9,000 crore ($1.3 billion) in loans which Mallya has allegedly routed to gain 100 percent or a partial stake in about 40 companies across the world.
Revocation of his passport, the Enforcement Directorate seeking Interpol to raise an international arrest warrant against him, a non-bailable warrant regarding an allegation of cheating the GMR Hyderabad International Airport Ltd by issuing them a dishonoured cheque for Rs 50 lakh , the declaration by the Prevention of Money Laundering Act (PMLA) court that he is a "proclaimed offender" in connection with ED’s money laundering probe are just some of the low points in the life of a man who was once, as we said before, known to be the king of good times. He has also incidentally been named in the Panama Papers and Paradise Papers in connection with offshore investments.
Mallya has repeatedly dismissed the proceedings against him as a witch hunt and expressed that he has done nothing wrong and that he is glad that a UK court which according to him is impartial is dealing with his case.
In a dramatic twist, on 3 October 2017, Mallya was arrested in London and almost immediately released on bail.
On 16 June 2018, he was ordered to pay Rs. 1.81 crore to Indian banks by a United Kingdom court.The hearings over a possible extradition are going on. December 10 then is the day of reckoning and the next episode of this riveting saga will then play out for the world to see. Stay tuned to Money Control podcasts for more updates.