Mallya Likely to Make Re­vised .₹ 6,000cr Of­fer for Set­tle­ment

He may pro­pose to make stag­gered pay­ments till Sept, but banks want the .₹ 4,900cr prin­ci­pal im­me­di­ately

The Economic Times - - Sports -

Kala Vi­jayragha­van & Saloni Shukla

Mum­bai: Vi­jay Mallya may make a re­vised .₹ 6,000-crore set­tle­ment of­fer to banks look­ing to re­cover .₹ 9,000 crore in dues stem­ming from loans to King­fisher Air­lines founded by the busi­ness­man, who faces the threat of hav­ing his pass­port can­celled. The new of­fer is said to in­volve stag­gered pay­ments till Septem­ber, said two peo­ple aware of the mat­ter. The banks though want the .₹ 4,900 crore prin­ci­pal im­me­di­ately fol­lowed by the in­ter­est re­paid in stag­gered amounts, banking ex­ec­u­tives said. The Supreme Court had asked Mallya last week to dis­close all his as­sets af­ter the banks re­jected pre­vi­ous set­tle­ment of­fers as be­ing too lit­tle and over­laden with con­di­tions. Mallya has to re­ply by April 21 and the banks are to re­spond to his of­fer by April 25, ahead of the next Supreme Court hear­ing on the day af­ter. There was no re­sponse to an email sent to Mallya, who left In­dia for the UK in March.

Mallya had ini­tially of­fered to pay Rs 2,000 crore up­front and a sim­i­lar amount by Sep- tem­ber. He had said another Rs 2,000 crore might be paid de­pend­ing on the out­come of a case King­fisher Air­lines had filed against an air­craft en­gine com­pany.

“We are ex­pect­ing a re­newal of the ear­lier of­fer, but it has to come with clear time­lines of pay­ment. We won’t en­ter­tain ifs and buts,” a se­nior banker told ET. “We re­jected the ear­lier of­fer be­cause a lot of con­di­tions were laid down; it looked like a spi­der’s web.”

State Bank of In­dia heads the group of 17 lenders that have been fight­ing more than 20 cases in var­i­ous courts and debt re­cov­ery tri­bunals across the coun­try af­ter King­fisher Air­lines col­lapsed in 2012. “We want him to cough up cash along with a clear list of as­sets or shares that will be sold to re­pay the loans, and it has to be ad­e­quate,” another banker said.

SEEK­ING AS­SUR­ANCE

What could com­pli­cate mat­ters is Mallya be­ing sum­moned by the En­force­ment Direc­torate (ED) to an­swer ques­tions re­lated to ac­cu­sa­tions of money laun­der­ing. ED has thrice sum­moned Mallya to no avail — on March 18, April 2 and April 9. While the busi­ness­man has sought a re­prieve un­til next month, ED now wants his pass­port re­voked. Mallya may seek as­sur­ances on this front. “It would be ridicu­lous if he of­fers to come down to the coun­try as per SC stric­tures but ED looks at seiz­ing his pass­port or de­tain­ing him,” said a lawyer not as­so­ci­ated with the case. The lenders had told the SC they were open to a ne­go­ti­ated set­tle­ment but have in­sisted that Mallya needs to be present for talks on the mat­ter. “ED had said they would seek non-bail­able war­rant if he doesn’t turn up, but clearly it is the SC which de­cides what is in the best in­ter­est of the coun­try. It makes bet­ter sense to re­cover the money from Mallya rather than get into a le­gal tan­gle,” said another ex­pert.

Bankers have, mean­while, been pro­ceed­ing on mul­ti­ple fronts against Mallya. Their at­tempt to sell the air­line’s head­quar­ters in Mum­bai failed — ex­perts said the re­serve price was too high.

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