Banks had previously shot down Mallya's offer of Rs 6,868 crore in April 2016 to settle dues.

With renewed offer will Mallya finally come to a negotiated settlement with banks
news Mallya Row Saturday, March 11, 2017 - 08:05

Banks to whom embattled tycoon Vijay Mallya on Friday offered a negotiated one-time settlement of their dues want him to spell out how much he is ready to pay up.

"It is crucial to know how much the offer is improved over his (Mallya's) previous offer of over Rs 6,000 crore," a banker told BTVi on the condition of anonymity on Friday.

Banks had previously shot down Mallya's offer of Rs 6,868 crore in April 2016 to settle the dues that are in excess of Rs 9,000 crore, including interest. The loans were advanced to his now-defunct Kingfisher Airlines between 2006-2012.

In a series of tweets earlier in the day, Mallya offered to negotiate with banks for one-time settlement of dues and sought the Supreme Court's intervention.

"Public sector banks have policies for one-time settlements. Hundreds of borrowers have settled. Why should this be denied to us? Our substantial offer before the Supreme Court was rejected by banks without consideration," tweeted Mallya.

Mallya's renewed offer came a day after the consortium of 17 banks led by the State Bank of India (SBI) told the apex court that "he had taken it for a ride" and urged the apex court to initiate contempt proceedings against the tycoon for "wilfully" flouting its orders.

Though Mallya appears to be offering an olive branch to the banks, the initial reaction from bankers is decidedly guarded.

Banking sources who spoke to BTVi said it was impossible to respond to Mallya's tweets without knowing the quantum of his offer.

Terming Mallya's offer "hypothetical" until it was received in writing, consortium's counsel S.S. Naganand told BTVi that banks were not in the business of social media.

"As a banking institution, we need a credible, written offer signed by him and delivered to the bank. If he gives a fair offer, the bank will consider it fairly," Naganand said exclusively to BTVi.

Some bankers, however, are hopeful that Mallya's latest tweets will lead to an improved offer on the table.

"Mallya may be ready to attach his personal resources and improve on the offer from last time," said another banker.

Fear of a backlash from investigation agencies haunt Mallya's lenders following the arrest of former IDBI Bank Chairman Yogesh Aggarwal and eight others, including the airline's former Chief Financial Office A. Raghunathan by the Central Bureau of Investigation (CBI) on January 24 in the Rs 750-crore loan fraud case.

"Any new offer should go through an oversight committee so that banks feel comfortable to settle without fear of backlash from the CBI," said one banker.

Moreover, the SBI-led consortium of banks failed to attract bidders in its efforts to auction Mallya's plush Kingfisher House in Mumbai and Kingfisher Villa in Goa on March 6, despite lowering the reserve price for the fourth and third time respectively.

In a related development, Union Finance Minister Arun Jaitley said in New Delhi that relevant agencies were trying to get Mallya back in India.

"Relevant agencies are trying to get him (Mallya) back through extradition or deportation. Diplomatic channel is also being used," Jaitley told the Lok Sabha during Question Hour.

Jaitley was responding to a query by Trinamool Congress lawmaker Saugata Roy, who wanted to know the steps being taken by the government against high-profile economic offenders like Mallya and former Indian Premier League (IPL)-T20 Chairman Lalit Modi.

"In the last two and a half years, the government has taken a series of steps. Under the Prevention of Money Laundering Act, attachment orders against Mallya have been issued by the Enforcement Directorate (ED). Assets worth Rs 8,040 crore were attached," Jaitley told Roy.

The Minister also told the members that he had an opportunity to discuss the issue with his British counterpart during his visit to London from February 24 to March 1.

"I also had the opportunity during my visit to discuss the issue with UK authorities concerned, including my counterpart," added Jaitley.

In Bengaluru, the Karnataka High Court on Friday ordered a bailable warrant against Mallya through the diplomatic process, with the bail amount set at Rs 50 lakh for him to appear before the court.

Mallya has been residing in Britain since he left India on March 2, 2016.

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