Sorry Mr. Mallya, your $75 million payout will have to wait

Mallya on February 25 stepped down as non-executive chairman of United Spirits Ltd.
Sorry Mr. Mallya, your $75 million payout will have to wait
Sorry Mr. Mallya, your $75 million payout will have to wait
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In a huge setback for Vijay Mallya, the Debt Recovery Tribunal court barred him from receiving the $75 million or 515 crore rupees severance pay which was to be given to him by Diageo as settlement.

The court on Monday said that he cannot get the money till all the cases against him are settled. DRT has set March 28 as the next date of hearing. 

The logic that the court has given for blocking the severance package is that once the disbursement is done, the money is not in their hands and they have no control over it.

The order came hours after Mallya said he was in talks with banks for a one-time settlement of debt that his now-defunct Kingfisher Airlines owes.

In a statement late on Sunday night, he had also stated that he had no plans to run away from his creditors.

SBI, which leads the consortium of 17 banks that lent money to the grounded Kingfisher Airlines, had moved DRT against the airline's chairman Mallya in its bid to recover Rs 7,800 crore. SBI had an exposure of over Rs 1,600 crore to the now defunct airline. Since January 2012, the loan was not serviced.

In the recent past, Vijay Mallya has lurched from one difficulty to the other.

The Enforcement Directorate registered a money laundering case under the Prevention of Money Laundering Act (PMLA) against Mallya and others in connection with the alleged default of over Rs 900 crore loan from IDBI bank.

Recently, former staff and customers of KFA have also come out in the open seeking action against Mallya, while at least three banks have declared him, his group holding company UBHL and the airline as wilful defaulters.

Responding to the allegations, Vijay Mallya released a press statement accusing the media of a witch-hunt and said:

"The past few few days have witnessed a near hysterical campaign in the media directed against me. I have always lived an honourable life and the calumny notwithstanding shall continue to do so. As to the allegations in the media, all I can say is I hope some sobriety and sense will prevail and truth not held a hostage to TRP."

With banks declaring Mallya as a willful defaulter, his lawyer Uday Holla claimed that banks were taking  action against the small fry while ignoring the big fish.

“My client Mallya is a small defaulter compared to Ambani's Reliance. Some of the companies have defaulted to the tune of Rs 40,000 crore, and nothing happens to them," he claimed.

Mallya on February 25 stepped down as non-executive chairman of United Spirits Ltd (USL), controlled by Diageo Plc, after making a $75-million deal with the company that also agreed to drop all charges of irregularities against him.

(With inputs from PTI)

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