A week after Diageo settled on a golden handshake with former UB Spirits owner and billionaire Vijay Mallaya amounting to a $75 million or 515 crores settlement for him to leave the company, the liquor emeritus has pulled a fast one on all the banks to whom he owes over 7000 crores in debt.
Mallaya owes 17 banks – including private and national banks – over 7000 crores in loans – incurred when his loss-making airline Kingfisher, was grounded and the banks had stepped in to bail Mallaya out and enable him to pay parts of his loans and employee settlements. The defunct Kingfisher still owes over 3000 crores in salaries to former employees.
The alcohol arm of the company was bought over by British alcohol giant Diageo in 2014 with Mallaya still retaining a small portion of the group. After Diageo decided to send them off with a generous bounty of $75 million last week, Mallaya had said that he would move to the UK and spend time with his family, causing shock and outrage in the country. No sooner than the news came in than the defaulted banks came out and moved court against Mallaya. SBI, which heads the consortium of banks that lent to Mallaya, had moved the Bangalore Debt Recovery Tribunal (DRT) seeking the arrest of Mallya, impounding of his passport for defaulting over Rs 7,000 crore loans.
SBI had also claimed first right on the $75 million severance package Mallya received from USL. However, with multiple cases of money laundering and fraud on his tail, he was required to stay with in the country.
However, according to well places sources, the “king of good times” has already fled the country, a day before his court hearing, leaving the banks seething at mouths. Diageo has confirmed that Mallaya has already been paid $40million, more than half of his $75 million settlement.
Ever since Kingfisher’s collapse, Mallaya had been severely under fire for living a lavish lifestyle even while he owed the banks serious amounts of money without seemingly an ounce of discretion. He might have just turned a fugitive what with leaving the country with this $40 million, with severe charges of loan defaults against him.