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'Vijay Mallya has completely ruined our lives'

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mkrishna100

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'Vijay Mallya has completely ruined our lives'

http://www.rediff.com/business/report/vijay-mallya-has-completely-ruined-our-lives/20160315.htm
'I used to tell my wife to pack extra food in my tiffin so that I could at least offer that to my colleagues who were living on vada pav.'

'Because of his lifestyle, he never suffered the way we suffered. The miseries and crises of life which we saw, he will never see.'


Anirudh Balal, who worked as a senior manager, airport services and liaison, at Vijay Mallya's Kingfisher Airlines for eight years, speaks to Syed Firdaus Ashraf/Rediff.com about how his life was ruined after the airline ran into rough weather:

'I joined Kingfisher Airlines in January 2005 when it was a very strong company (financially). Before joining Kingfisher Airlines, I was working with the Hotel Corporation o India, an Air India subsidiary.

I had great expectations from Kingfisher. The product was excellent and, till date, I don't see any other airline coming close to Kingfisher in terms of product and services.

Initially, Dr Vijay Mallya concentrated on the airline very well. However, he did not realise that he was spending too much money which the product will not be able to recover.


He was going too fast. He took haphazard decisions at that time. For example, he launched a low cost carrier and later realised that people want to fly business class. He introduced business class five months later, after the airline was already launched.

The Airbus aircraft being used by the airline did not have business class seats. Therefore, it was flown to Switzerland to change the seats.

Another big mistake was committed during the modification of the aircraft, an Airbus A320. Most airlines worldwide have eight seats in business class in two rows. However, Kingfisher put 20 big seats in business class of an A320 which occupied 40 per cent of the aircraft's space. These seats were booked only during peak season. Otherwise, there were hardly any passengers travelling in business class.

Dr Mallya was going too fast. He used to say at staff parties that he wanted to make Kingfisher the biggest airline in India within five years. He said in the first five years, he will buy 100 aircraft.

From May 2011, we started facing problems as our salaries started getting delayed. First, the date of salary credit was pushed to the 7th of every month from the 1st. Then, salaries started getting delayed by a month and, later, by three months.

Dr Mallya was saying he was trying to get some investors from abroad, but he failed. He lobbied hard to get 49 per cent foreign direct investment, but the opportunity was taken away by Jet Airways.

When salaries started getting delayed, we began having a tough time.

I have three daughters and they were all studying at that time. One of my daughters was in the United States pursuing a pilot training course. I found it difficult to even send money to her. She had to work part-time in supermarkets and hotels to fund her lifestyle.

In India, my other two daughters were studying in colleges and I had no money even to pay for their transport. And it was getting worse as I was the only earning member of the family. I had also taken a loan from the bank for my daughter's pilot training programme.

Everything went haywire after Kingfisher closed down.

My daughter did not get a job after returning from the US as, after the closure of Kingfisher, there were already many experienced pilots in the market without jobs and the then civil aviation minister Ajit Singh told other airlines to accommodate Kingfisher pilots.

Therefore, no new pilots got jobs during that period and my daughter had to forego her ambition. Even today, she is barely earning something on the ground. Her flying licence too has expired.

I could not repay her education loan and, therefore, I started getting notices. I took a loan of Rs 1,328,000 and could not pay the EMI (equated monthly installments) because of non-payment of salaries. Every time I received a notice from the bank, I felt ashamed.

My parents came to my rescue. They broke their fixed deposits and gave me money. Consequently, today they have no money and I am trying to support them financially.

I finally resigned from Kingfisher in November 2012 because I did not see any ray of hope of this airline getting revived.

But I was not paid my due salary and not even the gratuity although I had worked with the airline for 8 years.


During those days, I suffered hypertension and went into depression. I was only 43 years old at that time. I had to maintain my house and support the education of three daughters.

I showed a brave face to my family, but privately, I cried a lot. There were other Kingfisher staffers who did not have any money and had to support their elderly parents.

I used to tell my wife to pack extra food in my tiffin box so that I could offer that food to my colleagues who were living on vada pav.

The air-hostesses and other staff working at my office were not able to pay their house rent. Some of them were thrown out by their landlords. This was the plight of Kingfisher employees.

Worse, we used to see Dr Mallya partying when we were not getting even our salaries
. The management used to come and give us false hopes. We used to get e-mails that this is a temporary aberration and we will come back with flying colours.

The talks never ended and finally Kingfisher shut down its services on September 30, 2012. The last Kingfisher flight flew from Delhi o Mumbai and after that, engineers across India went on strike.

After that, Dr Mallya declared a partial lockout of the company. The employees went on a strike and never returned on duty, especially the pilots and engineers.

When I went to the office, we consoled each other. Had I sat at home, they would have marked me absent. It continued till November 2012. Finally I found another job.

Many Kingfisher employees did not get a job. Many air-hostesses, who worked with Kingfisher Airlines, never got a job because they had crossed the age limit.


The only people who got paid in Kingfisher Airlines were the employees who worked in the accounts department.


However, the foreign staff was paid salaries on time. We had eight foreign stations and employees working at all those destinations were paid. Dr Mallya never kept any salary of the foreign staff pending.

In London, he also paid compensation to the staffers with dues, but here in India we were not paid even the basic salaries.

Even today, I hope to get my outstanding salary. All staffers have united. Now we are getting support from the media and we are appealing to the government that whatever money is recovered from Dr Mallya, it needs to be paid to former Kingfisher Airlines employees.

There is a provision in the law that if any money is recovered from a defaulter businessman, it has to be paid to the employees whose salaries are due.

Almost 2,000 former kingfisher Airlines employees across India are in touch with each other. We are chipping in Rs 1,000 each to pay for the legal expenses to fight our case against Dr Mallya.

I feel sad that because of his lifestyle and other activities, he never suffered the way we suffered. The miseries and crises of life which we saw, he will never see.

I think he will stay in the UK or some other country. He will enjoy his life and so will his children and his grandchildren.

As for us, he has completely ruined our lives.'
 
A local court in Hyderabad has seems to have issued 4 more non bailable warrants against Mallya to day in the GMR cheque bounce case. The advocate appearing for GMR says there are more to follow. How it is going to be served upon him is what remains to be seen. The famous Hindi proverb says everything "अब पछताए होत क्या जब चिड़िया चुग गई खेत!!"
 
Have to wait and see how this Vijay Mallya issue continues . I very much doubt whether he will come back to India soon .
 
hi

in real life.....sometimes too fast is too dangerous....i remember ....every time when he gets new aircraft....he fly through

Thirupati/Thirumala and flowing flowers through plane to Lord Balaji.....i thought he is doing good..in every case...a common

employ will suffer.....atleast he had govt in hotel corporation...he would have stayed back...atleast job security is there..

sometimes ppl think that they can make a lot of money on a short time...this greedy makes horrible...i travelled kingfisher

from MUMBAI TO CHENNAI once...it was very surprise for many things...it was golden period of KINGFISHER....
 
Greed by a leader can be disastrous to the organization and its employees. Dr Mallya was highly greedy, doing things without much thought-process. It is unfortunate that thousands of employees and their families are left in lurch for no fault of them. When a Govt employee is denied of his rightful earnings and increments, much unrest is seen. Here, after reading this write up, one feels pathetic. I know the psychological sense of insecurity by the affected employees and their families. Government should examine the plight of these persons and try to accommodate them in Govt / quasi Govt departments as a good will gesture. God will teach the bosses like Dr Mallya a lesson for the sins...
 
A news has come out that before going abroad, Mallyya came to parliament on a day ,met Arun Jaitley and had a chat with him.
 


Row in Rajya Sabha over alleged Jaitley-Mallya meeting


Congress asks Narendra Modi to clarify centre’s stand on issue

Excerpts:

The Congress issued a statement asking, “Whether Vijay Mallya met and spoke to finance minister, Arun Jaitley before he suddenly left the country on 2 March, 2016? Whether Arun Jaitley informed and gave details of this conversation to Prime Minister Narendra Modi? Will the complete details of this meeting and conversation be shared with Parliament and people of India?’’


...............................
...............................


Just as Congress party along with some other opposition parties have tried to corner the NDA on the issues related to Vijay Mallya and Lalit Modi, some of the top ministers in the government have questioned the alleged role of Congress in the Bofors scam and how Ottavio Quattrocchi managed to leave the country. This political tussle will continue even during the second half of the budget session,” said A.K. Verma, a Kanpur-based political analyst and political science professor at Christ Church College.

Source: http://www.livemint.com/Politics/Hj...Sabha-over-alleged-JaitleyMallya-meeting.html
 
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Let us look at the situation dispassionately:

An employee of a company takes up long term financial liabities and commitments on a reasonable assessment that the Company will continue perpetually. And for the rare eventuality of the company going broke, he would have worked out alternate plans like restricting his family to just two children by not having a third child, saving money every month steadily to build a cushion, developing skills and experience which will get him another job within a reasonable time of say 6 months etc.. He would have kept a cash deposit to cover 6 months of normal spending for the family. More than that would make him touch his hard core corpus which is risky. Every sensible person does all this.

So all this wailing, tear shedding and cursing are just a drama. It is for the consumption of the public. The basic irreducible principle on which humanity moves is that no one is dependent on any one else (except for infants, handicapped and old citizens). So all these "poor" employees will find other employments or would have already found it. If not they will start a daabhaa or a kirana store and will survive. Survival with honour is not difficult. Then why this wailing? it is dircted towards a purpose.

The purpose is to catch the entrepreneur and strip him of all his belongings including the pant, shirt, banian and brief and distribute it among the hungry braying "ex"es and then to hang him publicly.

That brings us to the entrepreneur.

What was his crime? He floated a Company and invested his substantial funds in it to run an air-lines. The business was new to him and he failed. The company floundered and finally hit the rock and broke. Along with him investers and lenders also lost their money. He was a successful businessman before this because he owned one of the large liquour manufacturing companies in the world. Perhaps liquour being a habit forming consumer item he had a captive consumer base whose loyalty to his brand was strong. Perhaps strong because of the physical dependence and craving. This particular reason for his success was not factored in by himself as well as his investors and lenders when he started a new Company-that too with a large amount of investment. Perhaps he managed the airline company like he managed his liquour company. Any way what matters is that he lost the gamble and took with him the investors and the lenders down. For every stake holder the waking up was a tad too late. Add to this the politicians who had their fingers in every pie and pliable decision makers at high levels in the lending institutions. It became a huge conspicuous failure. And naturally media for its TRP ratings is braying for the Entrepreneur's blood. Employees are doing the same. Banks are moving in for the kill. The public having a ringside view is applauding and egging on the gladiators in this surrealistic drama to land the final blow. The curtains will come down shortly.

In all this high decibel, high adrenalin death game a fact or two are forgotten. Now to remember them:

Any entrepreneur, when he starts a business, he takes a risk. He manages the business and the risk also with his entrepreneureal skills and makes a profit. He ploughs back his profit into the business and increases the assets base progressively and makes the enterprise a bigger one. Then he sits back and enjoy and goes to create another such enterprise all over again. His special skill is that he has the capacity/talent to organize men, materials and finance and take them along with passion and commitment towards a common goal of success. All citizens do not have this skill. Many would prefer to settle down in a job where the responsibility involves a commitment just for the working hours of the day. The pay check would sure come because there are others also working like him. Now if there is a failure, that affects the entrepreneur more than every other stake holder. The failure is personal for him unlike for others. For this reason the law of the land protects the entrepreneur with special legal provisions.

When his enterprise has failed and has come to a grinding halt, when he is saddled with a loss which is more than all the assets he has in that business (experts call this negative net worth in accounting parlance) and when he is unable to service his debts the law has provided that he should apply for bankruptsy. That application would be an admission that he has become illiquid funds wise. That would clear the way for the court to take over his beleagured assets, sell them for the best price in market and after consolidating all such sale proceeds to distribute the money among the claimants (Govt., staff, lenders, creditors etc.,) in a rateable distribution.

This is to save the individual from certain and pathetic death.

So let us hope sop stories come to an end, Liqudator appointed by Court takes over the assets and every one gets at least 2 paise for every hundred rupees he had put in in the venture. And once declared bankrupt Vijay Mallya won't be eligible to start any more enterprises in this country. And the law of bankruptsy imposes several other restrictions too on a bankrupt. In our country the sop stories have an attraction. We like tear jerkers. But they too become boring if repeated several times. Let us close the chapter and move on.

Vijay Mallya is just one of the many failures. He has come to notice and criticism because he was flamboyant and was well known. There are many others who have gone bankrupt leaving the employees and lenders in the lurch. They too are powerful and live a happy life without applying for bankruptcy. Indian laws relating to bankruptsy are primitive and many escape through the sieves there in it. A new law on bankruptsy on the lines of what is there in US is an urgent necessity here. The Europeans, in the wake of industrialization and mass production invented the joint stock companies and very intelligently and with forth thought gave us his law of bankruptsy also. We aare just stuck with what was given to us and have not evolved like the europeans who have moved with time.

And the birdie sitting on a branch in my garden tells me Mallya is a brahmin and so the politicians are crest fallen that they had lost an opportunity to fight for him blaming the manu vadis for all the happenings (remember Vemula and Kanniah and others ). And that explains the silence of many a revolutionery here. LOL.
 
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And read this too Please:

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Why blame only Mallya?
Mohan Guruswamy
The Asian Age
Published on March 15, 2016
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[TD="width: 589"]We are forgetting the officials of the banking services department of the finance ministry, many of who served on the boards of the banks that lent Kingfisher Airlines money, and the many board directors who sanctioned the loans.Let’s get something right about Vijay Mallya. The popular narrative is that he milked the banks for Rs 9,000 crore to support his hedonistic lifestyle in India and abroad, and took off when the debt burden became excessive or no more money was forthcoming to evergreen his debts.

But we seem to forget that he enjoyed a hedonistic lifestyle much before Kingfisher Airlines and he had much money to spread around even before Kingfisher Airlines.
The Rs 9,000 crore he is now found to owe the public sector banks and others is the money he lost on Kingfisher Airlines. I understand the loan money is about Rs 4,000 crore and the rest is interest and the interest on interest. The banks just kept lending him money to evergreen its loans. This was not possible without political and bureaucratic support. Even if one little joint-secretary or one little MP or one little bank manager red-flagged the growing stain of red on Kingfisher Airlines’ debts, the bleeding would have been staunched.

Mr Mallya did not milk just the banks to keep Kingfisher Airlines afloat; he also milked his own companies, such as United Breweries and United Spirits, to support its flight into the deep red.
When a business makes a loss, it doesn’t always mean the money was stolen. It often means that it has spent more money than it has earned. This means Kingfisher Airlines employees got paid for all the years, except the last year, most of the time when the airline did not fly, the oil companies got paid for aviation turbine fuel supplied, the leasing companies got paid for the planes hired, the caterers got paid for the meals supplied on board, the airports got paid their landing and parking fees, and the taxes and cesses due for the most part were paid.

All during this period, Kingfisher Airlines did not sell enough seats to cover the costs, or just spent more money than it earned.
The question then is why was Mr Mallya lent money when quite clearly Kingfisher Airlines increasingly showed it had a business model that precluded it from earning money?Let’s not forget that during this period Air India and Indian Airlines together lost Rs 43,000 crore. The money lost under Mr Mallya’s stewardship was a measly Rs 4,000 crore. But we are not putting Ananth Kumar, Sharad Yadav, Praful Patel and Ajit Singh out to dry for its losses. Why? We do not even want to even find out how much money was made by the politicians and bureaucrats during the last decade on account of the two public sector airlines?

Some astounding numbers are commonly heard, as no airline worth its name buys aircraft outright anymore. They lease them,, but Air India and Indian Airlines paid hard cash.
In the entire hullabaloo over Mr Mallya’s last flight to the cooler and more sanguine climes of Hertfordshire, we are forgetting the bankers who lent Kingfisher Airlines for something quite as spurious as its brand name. We are forgetting the officials of the banking services department of the finance ministry, many of who served on the boards of the banks that lent Kingfisher Airlines money, and the many board directors who sanctioned the loans. Such loans are sanctioned when everybody gets to drink a little at the trough. Now Mr Mallya has flown the coop that nurtured him, and it seems that all others stand absolved.Forget Mr Mallya. He won’t be coming back soon.

The banks can attach his cars and homes in India, but he is clearly out of reach of the “authorities” which don’t really want him back. They probably long for him to take his secrets to his grave.
But Mr Mallya in his going is serving one useful purpose. It takes focus away from how other “industrialists” fund their lavish lifestyles and have created empires overseas. Anil Agarwal and the two Ruia brothers, Shashi and Ravi, are now bigger abroad than in India. Not long ago Nitin Gadkari was cruising on the Essar yacht berthed at Cannes. Our “industrialists” all use their company assets for personal use.Money flows from our business houses to political groups like Naxalites in Bastar and the United Liberated Front of Asom, in addition to all the mainstream political parties. The not-too-industrious industrialists, most of who make most of their money from the public sector banks, also fund the hedonistic political lifestyle of our elite.

Why is the Reserve Bank of India not blowing its whistle to stop this? Why is the department of company affairs silent? One can understand finance minister Arun Jaitley acquiescing to this, but what keeps RBI governor Raghuram Rajan from reading the riot act to the banks?
The problem is that we are far too invested in this system. If the banks tighten up, as many as six of our top ten business houses will fold up or will have to be dismantled. In other words, really restructured. Except for Reliance Industries, the Tatas and Aditya Birla, all other major business houses are over-leveraged and mortally indebted.

If we rock the boats now, many will capsize. The economy will slow down further. Mr Mallya is, relatively, a small fish. The big sharks are still circling the banks.Will Prime Minster Narendra Modi please stand up in Parliament and assure the nation that all money lent to them are as per norms and prudential banking practices, and that the loans are not being ever-greened? Will Rahul Gandhi demand that Mr Modi give the nation an assurance on this? I don’t think so. Both are betting on short public memories.

We love gladiatorial sports and the Roman emperors best understood mass psychology. We have plenty of pilgrims to feed the lions and the public’s frenzy.
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Thanks Vaagmiji for your perspective on Vijay Mallya issue and for your subsequent post by Mohan Guruswamy .

In the end this is what is going to happen as claimed by the author .So no amount of crying or chest beating is going to be of any use . The System and Poeple that helped him get the loans are the same who ara also now giving him the escape route and some Bank Officials will be arrested or taken to task to divert the attention and bring the heat down and no one will get any money ( either the banks or the employess ) and if anyone is expecting anything then he will only get a big "I AM A FOOL" stamp on his forehead .
The banks can attach his cars and homes in India, but he is clearly out of reach of the “authorities” which don’t really want him back.
 
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It is curious that stressed assets and NPAs get highlighted in the third year after an election.

It is known that political parties and politicians are bank rolled by industrialists and corporate houses.for fighting elections.

These entities borrow money from nationalised banks with the help and connivance of the political elements.

After elections, the most convenient time for pay back is third year of any regime.

So banks have to oblige by writing off these loans which have become stressed assets.

It happened during 2010 after 2008 elections also.

My feeling is why kingfisher alone? Is it because of his lifestyle?

Perhaps he is not a supporter of ruling party.

Only JDU roots for him.

Some brahmins here also might sympathise for him.

He has my sympathies as I like his enterprise and flamboyant lifestyle .

He lives life kingsize and openly declares he enjoys what he is doing.

He does not come out with sob stories like some here.

He deserves a better deal not witch hunting.
 




Some Delhi Brahmin here may like Mallya's kingsize life style and probably his 'Bikini Babes' too.

But Ram Gopal Varma has different version to say:
-----------------------------------------------------------------------------------

Ram Gopal Varma's 'aag' on Vijay Mallya and his 'bikini babes'



Ram Gopal Varma and his Twitter rants are always in the news. This time, the face on his dartboard is of none other than business tycoon Vijay Mallya.


Scathing his attack on Mallya's current 'all in debt' status, RGV, in a series of tweets asked the businessman to lend some of his 'bikini beauties' to the bankers to "square off all his debts." "I think Vijay Mallya should dip into his personal bank and give one bikini beauty each to every bank he owes and square off all his debts," read his tweet. "The banks might not agree to Vijay Mallya's bikini proposal but the bankers might," another tweet read. "If the money he borrowed is what created properties of his bikini clad girls, wouldn't they be enough payback for the bankers? Just asking," tweeted RGV, third in the thread. The filmmaker, not only slammed the 'bikini beauties' for Mallya's situation, rather pointed triggers on B'Town celebs like Deepika Padukone, Nargis Faqri, Katrina Kaif and Esha Gupta, saying they can help in swaying the bankers.

Read more at: http://timesofindia.indiatimes.com/...and-his-bikini-babes/articleshow/51369480.cms
 
There is something called as "piercing the corporate veil". In essence even though the concept of a legal entity protects an individual from personal and collective liability, should it be found that the practices adopted were unfair, a case could be made to attach his personal assets.

Of course, this would most obviously involve an evaluation of the consortium's decisions to lend to KFA. But should it so happen that banks had erred or manipulated to serve their ends, it does not absolve VM of his irregularities, if any.

I feel that the matter if taken too deep might open up many holes and dungeons... let us wait and see what happens.
 
I find it amusing that the might of the indian state is pitted against an individual to fix him.

Is it shadow boxing?

We decide thru media trial that someone is a villain and we feel happy that a well off person whose lifestyle we both admire and despise at the sametime[ both because

primarily that we cannot be like him] is being fixed by state power.

The political class irrespective of political affiliations uses people like VM when it suits them and then distances itself when it becomes inconvenient.

The more we dig , more skeletons will come out.

Everything except the missing several thousand crores will come into the public domain
 

“The rich don’t even go broke the same as the rest of us,"

Is broke 'VJ' Mallya living it up in plush English mansion?

The villagers know him for his fast cars, and beautiful guests'

One look at the pictures circulating of the English mansion that Vijay Mallya is believed to have “retired” to and you are instantly reminded of the line from the blockbuster The Dark Knight Rises: “The rich don’t even go broke the same as the rest of us, huh?” In the film, Selina Kyle says this line in response to hearing that, though bankrupt, Bruce Wayne gets to keep his sprawling mansion and estates.

If indeed, Mallya has left behind a debt of nearly Rs 9000 crores in India and returned to his estate in Tewin in North London, then one can’t help but feel much like Selina Kyle.

After all, as The Times of India reports, the sprawling 30-acre estate has a tennis court and two swimming pools, all enclosed with high walls, metal gates and round-the-clock security. “State-of-the-art interiors and a battery of expensive cars accessorize the bungalow in the quiet, verdant English village,” according to an NDTV report.

See more at: http://www.thenewsminute.com/article....wCRqLfnx.dpuf
 
VM is not broke.

A limited company where he had a stake failed. It happens to many.

Now a joke on vm

"they say as per hindus belief, the body is left behind and the spirits leave at the end of lifes journey

In case of VM , the body has gone away and spirits are left behind.
 
[h=1]This king of good times is not having the best days.
-----------------------------------------------------------------

"The great Indian escape: Why is Vijay Mallya in trouble for fleeing the country?
[/h][h=2]Here's all you need to know about the money laundering case against Vijay Mallya and his much-talked about escape from the country.[/h]The king of good times is not having the best days.

Business tycoon and Rajya Sabha member, Vijay Mallya, is in trouble for his hush-hush escapefrom the country right around the time he is wanted by the Enforcement Directorate for money laundering.

Mallya, known for his extravagant lifestyle and Kingfisher brand of liquor, is in debt with 17 public sector banks for an estimated amount of Rs 9,091 crore, who have moved the Debt Recovery Tribunal against him.

Read more at: http://indiatoday.intoday.in/story/...ndering-enforcement-directorate/1/617785.html
 
hi

he did business......but he failed....here in US.....chapter 11 banfkruptsy filed....means the company closed....there are

many companies failed....so we need some basic protection for employees....
 
IMG-20160316-WA0000.jpg
 
There is something called as "piercing the corporate veil". In essence even though the concept of a legal entity protects an individual from personal and collective liability, should it be found that the practices adopted were unfair, a case could be made to attach his personal assets.

Of course, this would most obviously involve an evaluation of the consortium's decisions to lend to KFA. But should it so happen that banks had erred or manipulated to serve their ends, it does not absolve VM of his irregularities, if any.

I feel that the matter if taken too deep might open up many holes and dungeons... let us wait and see what happens.

1. Personal tastes and idiosyncracies are just personal. VM's keeping company with a bevy of beauties is his personal life style. There is nothing to question there. If any one harps on that it means he is just envious. VM was born with a silver spoon to a rich business man. It is not as if he borrowed money from the banks to buy a bungalow, to pay his cook for making an omlette, to pay for his next drink or to pay the bunch of beautiful girls for the time they spent with him.

2. If the practices adopted to obtain loan from banks were unfair, that would mean he would have lied to banks, decked up his figures, cheated by using funds for buying a bunglow for his concubine etc., That does not appear to be the case here. He made remittances abroad for payment of lease rentals for the aircrafts, and for buying spares for the aircrafts. if he had diverted the money by overstating the values it would become an offence and that has not yet been proved as a charge. It is all under investigation.

To me it appears a simple case a business failure due to inept management.

If banks reclassified the loans, they had their own sound reasons to do that. If they had branded/classifed the loans as bad debts right at the first instance of troubles, the banks would have to provide that much more from their profits for these assets in the Balance Sheet for the relevant year. That could have meant several things. It could mean the bank buckling under the burden causing a run on it. A run on a bank by its depositors is the worst possible thing that could happen to a bank. That could also mean less dividend for the shareholders which in turn would mean a fall in the share price from say 2000 (paid up value 10) to just Rs.2. That would mean wiping out of the wealth of several investors. That can force the Govt. to hammer out a relief package. That can mean money being cut for someother welfare measure or defence purchases by the Govt. The consequences will be mind boggling.

In the midst of all this there was one solution which the banks could have adopted and we do not know why that was not done. The banks, when they understood that the company was in trouble, and when they had in their judgment decided to give additional loan to keep the company going in the hope that it would rise from the ashes like a phoenix, could have stipulated the discipline of cash budget on the Company as an instrument of control to go with the package (with core banking solutions the control can be really exercised realtime). In simple words the cash budget would mean the company gets the funds but has to spend the money strictly for the purpose for which it was given. The Company submits a monthly or a weekly cash budget to the bank in which the inflows and outflows are individually supported with reasons by the company and accepted by bank. If a cheque/debit not included in the budget comes for payment the bank will have the right to reject it straight. This is usually done in large reconstructed assets and their recosntruction packages. Why this was not done in the case of VM's Airline Co., is a big question. May be here comes our Political masters who have their hand on every such juicy pie.

When you give additional loans without such a mutually agreed cash budget, the business man uses his own business judgment to use the funds for the business as he deems fit. This is what has happened in the case of VM. And we are barking up the wrong tree for what happened. LOL.
 
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1. Personal tastes and idiosyncracies are just personal. VM's keeping company with a bevy of beauties is his personal life style. There is nothing to question there. If any one harps on that it means he is just envious. VM was born with a silver spoon to a rich business man. It is not as if he borrowed money from the banks to buy a bungalow, to pay his cook for making an omlette, to pay for his next drink or to pay the bunch of beautiful girls for the time they spent with him.

2. If the practices adopted to obtain loan from banks were unfair, that would mean he would have lied to banks, decked up his figures, cheated by using funds for buying a bunglow for his concubine etc., That does not appear to be the case here. He made remittances abroad for payment of lease rentals for the aircrafts, and for buying spares for the aircrafts. if he had diverted the money by overstating the values it would become an offence and that has not yet been proved as a charge. It is all under investigation.

To me it appears a simple case a business failure due to inept management.

If banks reclassified the loans, they had their own sound reasons to do that. If they had branded/classifed the loans as bad debts right at the first instance of troubles, the banks would have to provide that much more from their profits for these assets in the Balance Sheet for the relevant year. That could have meant several things. It could mean the bank buckling under the burden causing a run on it. A run on a bank by its depositors is the worst possible thing that could happen to a bank. That could also mean less dividend for the shareholders which in turn would mean a fall in the share price from say 2000 (paid up value 10) to just Rs.2. That would mean wiping out of the wealth of several investors. That can force the Govt. to hammer out a relief package. That can mean money being cut for someother welfare measure or defence purchases by the Govt. The consequences will be mind boggling.

In the midst of all this there was one solution which the banks could have adopted and we do not know why that was not done. The banks, when they understood that the company was in trouble, and when they had in their judgment decided to give additional loan to keep the company going in the hope that it would rise from the ashes like a phoenix, could have stipulated the discipline of cash budget on the Company as an instrument of control to go with the package (with core banking solutions the control can be really exercised realtime). In simple words the cash budget would mean the company gets the funds but has to spend the money strictly for the purpose for which it was given. The Company submits a monthly or a weekly cash budget to the bank in which the inflows and outflows are individually supported with reasons by the company and accepted by bank. If a cheque/debit not included in the budget comes for payment the bank will have the right to reject it straight. This is usually done in large reconstructed assets and their recosntruction packages. Why this was not done in the case of VM's Airline Co., is a big question. May be here comes our Political masters who have their hand on every such juicy pie.

When you give additional loans without such a mutually agreed cash budget, the business man uses his own business judgment to use the funds for the business as he deems fit. This is what has happened in the case of VM. And we are barking up the wrong tree for what happened. LOL.

Yes, you are right when you say that VM's personal taste is his own. No one can question that. But when it comes to a company where there are obligations to several sections - banks, creditors, employees - business prudence should be administered. It could very well be a case of mismanagement, but that has to be proved through a diligence/investigative audit. Did personal interests override the business interest?

Cash flows can easily be fudged by passing book entries (between bank accounts) and then diverting to some other in the guise of payments, settlements etc. It will involve a careful scrutiny to identify and locate such instances, and, if done cleverly, would be difficult to prove.

Did VM and the top brass in KFA get their dues when that of the employees were withheld? That is another unasked question.

There are so many questions.
 
Consortium of banks led by SBI could not even auction a building owned by king fisher in mumbai successfully.

Are we expecting too much from them regarding recovery of loans from VM?

No sense in doing post mortem of lost money.

It is very difficut to prove diversion .

Besides I do not buy the view that the debts can be classified as good or bad debts.

There should be even handedness in debt recovery.

It would be best if govt reduces its stake in banks below 49% and privatise them if possible.

It should not be used as a cash cow to be milked by politicians and businessmen
 


Vijay Mallya seeks time till April for personal appearance before ED

Excerpt:

"... his (Mallya's) facts are very clear. Every government agency, whether its taxation department or investigative agency, win Mumbaiver he has violated law, is going to take strong action. As far as banks are concerned, they are going to recover every penny of the rupee that they can from him," Finance Minister Arun Jaitley said. -

See more at: http://www.thenewsminute.com/articl...onal-appearance-ed-40425#sthash.hVQAePg7.dpuf
 
Consortium of banks led by SBI could not even auction a building owned by king fisher in mumbai successfully.


This sprawling property which is VM's personal pride is at stake. This is located in Andheri, once represented the glory of India's first luxury airline and its flamboyant boss.

It was an e-aution.

It is reported that this property's true market value is less, but the Bankers seems to have set a base price of Rs.150 crore.

Now who will come forward to buy a property for Rs.150 crore, while its actual value in real estate market is only between 40-50 crore?

And so the auction was not successful presumably due to litigation fears and a high reserve price. May be the bidders could have taken a stand to wait-and-watch too!

But so long as VM stands as a major defaulter on KFA loans and a willful defaulter, he is set to lose 'Kingfisher House' sooner or later

Not only his property but have intiated action to sell his high-end cars like Honda City EXi, Honda Civic, etc besides furiture, fittings and Airconditioners,etc

The recovery process is on...

These Banks may also know that their only
chance to recover their dues is if he returns to the country and offers to pay back them from his personal wealth.

But, will this happen......????
 
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