FROM THE EDITOR-IN-CHIEF
India Today has had a long association with the Mallyas. In 1982, we featured Vittal Mallya on our cover as one of India’s Growth Kings. Vittal, already the leader of the beer, liquor and processed foods industries, was a simple, austere, meticulous businessman who travelled to office in his Fiat even while a Mercedes Benz was parked at home. His untimely demise in 1983 put his 28-year-old son Vijay in the hot seat. A race-car driver, a horse owner, a dashing international playboy who loved the good life, Vijay Mallya could not have been more different from his father. In 1986, in an interview with INDIA TODAY, he proclaimed: “I know I have the image of being a spoilt kid, but in 20 years I will be known as a king in my own right.” Indeed, the tag line for Kingfisher beer—the King of Good Times—was as much an advertising campaign as it was Vijay Mallya’s moniker for himself.
I first met him in 1992, when BUSINESS TODAY was planning a cover story: Is Mallya Broke? He came to our office in Delhi’s Connaught Place. Though his reputation preceded him as a brash, arrogant brat, to my surprise’, he was extremely polite and explained his side of the story very cogently. At no point did he tell me not to publish something, or to write anything favourable.
There can be no denying that, over the next two decades, Mallya went on to become India’s undisputed liquor baron. He was an astute businessman who expanded his father’s empire dramatically. Apart from building a monopoly in which one in two bottles of beer, and two in five bottles of spirits in India were sold by United Breweries, he also acquired international distiller Whyte & Mackay, which boasted of top brands such as The Dalmore, Isle of Jura, Glayva, Fettercairn, Vladivar vodka and Whyte & Mackay blended scotch. At the same time, he entered several new businesses and expanded his personal cult by joining the Indian Premier League with Royal Challengers Bangalore and Formula One racing with Force India. He also got close to political leaders and was twice nominated to the Rajya Sabha.
But it was Mallya’s image as a scotch-drinking, yacht-sailing high-flyer that has eventually come back to bite him. While there are several other defaulters in India who are not as visible as he is, Mallya has emerged as a poster boy who seems to be cocking a snook at the country even when his business has fallen on hard times.
Mallya’s cardinal error was entering the aviation business at the wrong end of the spectrum with the high-end Kingfisher Airlines, and at a bad time with oil prices soaring and services costs high. He tried to dig himself out of the hole by acquiring the budget Air Deccan, and when that didn’t work, allowed hubris to take over by thinking that he could still turn things around.
Businesses go bad, and even the biggest businessmen go bankrupt. That’s acceptable, but our public sector banks, which kept lending Mallya money without due diligence, are actually more culpable unless he acted fraudulently. With their flagrant lack of accountability, it is no surprise that NPAs in public sector banks amounting to Rs 3.6 lakh crore, which constitute 90 per cent of the total NPAs, have broken the back of the banking sector.
Our cover package looks at the flight and fall of Vijay Mallya—his lifestyle, his successes and failures, his downfall, and most importantly, whether the Rs 9,000 crore that he owes the banks can indeed be recovered.
The Mallya episode raises serious questions about public sector banks in India. Leeched by politicians through the loan melas of the past, they have now allowed the corporate sector to use its clout and run them into the ground. The taxpayer has borne the brunt of the misdeeds of these banks for long enough. The government should get out of the business of banks. It is time this crony babuism ends once and for all.