Business / Banks recover another ₹792 crore by selling shares of Vijay Mallya: ED

Zoom News : Jul 17, 2021, 09:06 AM
MUMBAI: The Debt Recovery Tribunal (DRT) on behalf of the State Bank of India (SBI) led consortium of banks sold shares worth Rs 792.12 crore of Vijay Mallya on Friday, that were confiscated by the Enforcement Directorate (ED) in a money laundering case, to recover their loan money. The ED had gave them NOC for it recently.

Earlier, the consortium had recovered Rs 5,824.50 crore and Rs 1,357 crore in two different occasions by selling Mallay’s shares. The bank recovered 81 % of their total claim of Rs 9,900 crore against Mallya.

Most of the shares were of United Breweries Ltd (UBL) and United Spirits Ltd (USL) that Mallya owned in the name of 7 different companies, some of them are paper companies, controlled by him.

Earlier the ED had confiscated these shares in the case after which on the exchange record the ED was the owner of these shares.

Recently with the court permission, the ED had transferred these shares in the name of the SBI led consortium after ensuring that Heineken in principle had agreed to purchase most of these shares.

Mallya, a fugitive economic offender, is in the UK and the government of India trying to extradite him in the case. Under the law, once the court declares an accused fugitive economic offender, the government agency can confiscate all his properties—even those not associated with the crime—and after court confirmation, it becomes government property that can be auction to recover the bank loss.

Mallya allegedly defrauded Rs 9,990 crore from SBI led consortium. Mallya took bank loans on his personal guarantee, a corporate guarantee of UB Holdings and an inflated brand guarantee of now-defunct Kingfisher Airlines.

The loan was taken for operating expenses of Kingfisher Airlines but was used for other purposes, including to procure luxury aircraft for Mallya’s personal use and properties.

Afterwards, the Kingfisher loan accounts turned into NPA causing loss to the banks.