SBI loan default case: CBI registers fresh case against Mallya, KFA and UBHL

August 13, 2016 02:24 pm | Updated November 17, 2021 04:40 am IST - New Delhi

The Central Bureau of Investigation has registered a fresh case against Vijay Mallya, Kingfisher Airlines, United Breweries Holding Limited and others for allegedly causing a loss of Rs. 6,027 crore to a consortium of banks led by State Bank of India.

The consortium, which had earlier refused to accept Mr. Mallya's offer for part payment of the dues, has now lodged a complaint with the CBI to initiate criminal action against him. They had initiated debt recovery proceedings against him in the court and also approached the Supreme Court.

According to the complaint, Kingfisher Airlines availed of credit facilities between 2005 and 2010. However, it allegedly failed to keep up with the repayment of loans 2009 onward. Thereafter, the banks recalled the credit facilities and invoked the personal guarantees of Mr. Mallya and United Breweries Holding Limited.

"The banks had not kept the accounts with the consortium banks regular, owing to which the loans were finally declared NPA," said a CBI official.

The banks, led by SBI, have alleged that there was a conspiracy by the group company, its promoter and others to cheat them.

UBL withholds Rs 1.64 cr payment to Mallya

United Breweries Ltd has withheld Rs 1.64 crore payment to its Chairman Vijay Mallya after tax authorities barred any payments being made to him in view of ongoing tax case against his defunct Kingfisher Airlines.

Without naming Mallya, the company said it has received an order dated June 28, 2016 from the Commissioner of Income Tax (TDS), prohibiting from making any payment to a director.

In a stock exchange filing, United Breweries Ltd (UBL) said: “The company has accordingly withheld payment Rs 1.64 crore relating to the director commission and sitting fess payable to the aforesaid director.”

Further the company had received an order dated March 11, 2016 from the Deputy Commissioner of Income Tax (International Taxation) Bangalore, asking it “to create a charge in favour of the Central Government on any amount due or likely to be due to a director of the company, to the extent of Rs 67,980 lakh relating to tax demands on Kingfisher Airlines Ltd.”

Earlier on September 30, 2015, UBL said, it had received an order from the Debt Recovery Tribunal Karnataka which directed the company “not to pay/release amounts that may be payable with respect to shares in the company held by a director (including his joint holdings) and United Breweries (Holdings) Ltd, without its prior permission“.

“Accordingly the company would withhold payment of proposed dividend on aforesaid shares, which is subject to approval by the shareholders in the ensuing AGM,” the filing said.

The board of directors UBL had proposed a dividend of Rs 1.15 per equity share of Re 1 for the year ended March 31, 2016.

As on the quarter that ended on June 30, 2016, Mallya held 8.08 per cent on his own in UBL with 2.14 crore shares, while the promoter group entities hold 30.71 per cent stake with 8.12 crore shares

On the issue of wilful defaulter tag on Mallya and its implications after the recent regulatory changes, UBL said its “board will continue to monitor and review the situation” after a retired Chief Justice of the Supreme Court of India gave opinion “that the Chairman and the company conform to the current regulatory norms“.

As per the recent amendments in regulations pertaining to wilful defaulters, restrictions are imposed on a company from floating public issue or raising debt instruments or borrowings and for continuing on the Board.

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