The Kingfisher story Vijay Mallya – Once upon a time there was a king Journey of Vijay Mallya From the King of Good Times to the King of Bad Times

1. Vijay Mallya-King Of Bad Times
Group Members:
Prathamesh Baluragi(04)
Bhakti Baniya (06)
Riddhi Chinchay (16)
Sameer Dhurat (21)
Vaibhav Jankar (33)

2. Introduction
Vijay Mallya
Vijay Mallya in 2008
Member of Parliament (Rajya Sabha)
In office
1 July 2010 – 2 May 2016
In office
10 April 2002 – 9 April 2008
Constituency Karnataka
Personal details
Born 18 December 1955 (age 60)
Kolkata, West Bengal
Nationality Indian
Political party Independent
Spouse(s) Sameera Tyabjee (divorced)
Rekha
Children Siddharth Mallya
Parents Vittal Mallya (Father)
Lalitha Ramaiah (Mother)
Occupation Businessman
Religion Hinduism
Signature

3. Vijay Mallya Profile
• Known for his flamboyant lifestyle and chilled out
attitude, Vijay Mallya is the owner and chairman of the UB
Group (United Breweries Group).
• Launched a new domestic airline called Kingfisher Airline
• Vijay Mallya is the son of a famous industrialist Vittal Mallya.
• In 2005, Vijay Mallya established Kingfisher Airlines.
• In a short span of time Kingfisher Airline has carved a niche for
itself.
• It was the first airline in India to operate with all new aircrafts.
• Kingfisher Airlines is also the first Indian airline to order the
Airbus A380.

4. • Vijay Mallya has other interests too apart from business. He
has won trophies in professional car racing circuits and is a
keen yachtsman and aviator.
• Vijay Mallya has also won numerous trophies in horse racing
including several prestigious Derbies. In 2000, Vijay Mallya
entered politics superceded Subramaniam Swamy as the
president of Janata Party.
• Till 2 May 2016 he was M.P. in Rajya Sabha

5. Business
• Mallya became the Chairman of United Breweries Group in
1983 at the age of 28, following his father's death
• He consolidated the various companies under an umbrella
group called the "UB Group", spun off non-core and loss-
making businesses and focused on the core business
of alcoholic beverages.

6. • United's Kingfisher beer has more
than a 50% market share in India's
beer market. The beer is available in
52 countries outside India and leads
among Indian beers in the
international market
• United Spirits Ltd, the flagship
company of the UB Group, achieved
the historic milestone of selling 10
crore (100 million) cases, becoming
the second-largest spirits company in
the world by volume under Vijay
Mallya's chairmanship

7. • Kingfisher Airlines, established in
2005, was a major business venture
launched by Mallya.
• It eventually became insolvent and
had to be closed down. As of October
2013, it had not paid salaries to its
employees for 15 months, had lost its
licence to operate as an airline, and
owed more than US$1 billion in bank
loans.
• By November 2015 the amount owed
to the banks had grown to at least
$1.35 billion, and there were other
debts owed for taxes and to
numerous small creditors.
• As part of the Kingfisher collapse,
Mallya is accused of being a "willful
defaulter" under Indian law, including
accusations of money laundering,
misappropriation, etc

8. Vijay Mallya – Net Worth
• Net Worth-$ 1.2 Billion
Vijay Mallya -House and other properties
‘White House in the Sky’
Property in France at Bay Bridge. His
neighborhood has the likes of Tiger
Woods and Williams Sisters. He bought
that house for $1.2 million in 1984.
He also bought a plum penthouse
apartment in Trump Towers, New York
for $2.4 million.

9. Back home in India, he has a huge holiday
home worth Rs. 90 crores in Goa called the
‘Kingfisher Villa’.
Vijay Mallya also owns a few castles in Scotland
and farm houses in London.
The flamboyant corporate baron owns the
island of Sainte- Marguerite, one of the largest
‘Lerin Islands’. This island property is located a
few miles off the French Riveira, in Cannes.
Mallya is the owner of the
Mabula Game Lodge in South
Africa, the property is spread
across the lush of 12,000
hectares of land.

10. Car Collection
The man who has lived the slogan of his brand ‘The King of Good Times’ has a
collection of more than 250 cars, including luxury and vintage models.
Jet
The ‘Richard Branson of India’
owned a couple of jet planes,
Boeing 727 and Gulfstream
Yacht
He had a 95 meter long mega-yacht
called the Indian Empress with a
helipad.

11. From Good Time To Bad Time
• In 2006, the Mumbai-based IDBI Bank got a proposal from
Kingfisher Airlines, seeking funds to acquire aircraft.
• Vijay Mallya had launched the airline the previous year, in May
2005, on his son’s birthday and he had been cruising.
• He had bought Shaw Wallace, one of the oldest liquor
manufacturers in India, for Rs 1,300 crore from the Chhabria
family after the death his arch rival, Manu Chhabria, in 2002.
• He had topped that by striking a deal with the British beer
maker Scottish and Newcastle, which had bought a 37.5 per
cent stake in Mallya’s United Breweries Ltd for Rs 940 crore.
• However, when the Kingfisher proposal came up at a meeting
of the credit committee of the IDBI in those go-go days, not
many were convinced about financing the aircraft acquisition
plan.

12. • They had their reasons: The highly competitive airline industry
was known to be a capital guzzler and this, after all, was a
fledgling airline.
• There was another reason too. Much earlier, as a
development financial institution, IDBI had encountered
lending problems while dealing with Mallya after his
acquisition of Mangalore Chemicals and Fertilisers. So the
committee chose not to approve the proposal.
• But a few years later, in 2009, the bank provided a loan of Rs
900 crore to Kingfisher, a decision that has come to hurt top
officials of the bank, who are now being put on the wringer by
the Central Bureau of Investigation (CBI) and other agencies
with Mallya being declared a ‘wilful defaulter’.

14. • So how did it all go so horribly wrong for Mallya? Even before
Kingfisher could be launched, the aviation industry had started
bleeding.
• Crude oil prices were high, with fuel costs often making up
half the operating costs of airlines. But Mallya announced his
would be a premium, world-class airline.
• He personally hired his airhostesses and Yana Gupta, a
Bollywood actor, performed in a video that showed safety
instructions before take-off.
• The service standards and comfort provided by the airline in
the initial years attracted many passengers, marking it out
from other full-service airlines in the business then.
• Mallya, by now unstoppable, moved to acquire a bleeding Air
Deccan in 2007 (the deal was completed in 2008), with the
group’s cash cow and holding company, United Breweries
Limited, paying Rs 550 crore to buy a 26 per cent stake in the
low-cost carrier promoted by Captain G R Gopinath.

15. • At its peak, Kingfisher Airlines was the second largest airline in
India in terms of the number of passengers it carried.
• The Deccan acquisition was ostensibly to allow the airline to
fly internationally (airline rules in India say carriers can go
abroad only after they complete five years of operation and
have 20 aircraft).
• In September 2008, three years after Kingfisher first took to
the skies, the airline launched its Bengaluru-London flight.
• But as oil prices started to climb (an average of $72.68 a dollar
between 2005 and 2010) and the company struggled to run a
business that included a full-service airline and a low-cost
carrier, its finances floundered and its debt burden and losses
surged.
• By the end of March 2008, Kingfisher’s debt had mounted to
Rs 934 crore.

16. • A year later, it had multiplied to Rs 5,665 crore. Its net losses widened from Rs
188 crore in 2007-08 to Rs 1,608 crore the following financial year.
• As crude prices soared towards $140 a barrel, the global aviation industry
too was facing a crisis
• In 2008, the International Air Transport Association (IATA), the global aviation
industry body, estimated losses of $5.2 billion.
• For airlines in India, the hit was much harsher with taxes and levies topping
oil prices.

17. • By 2009-10, Kingfisher Airlines had accumulated a debt of
over Rs 7,000 crore.
• It continued to pile up losses and had already turned net-
worth negative the previous financial year.
• That was also the year Kingfisher Airlines turned into a non-
performing asset or a bad loan for banks.
• In November 2010, banks for the first time restructured
Kingfisher’s debt.
• The consortium of lenders led by State Bank of India
converted Rs 1,355 crore of debt into equity at a 61.6 per cent
premium to the market price of the Kingfisher Airlines stock.
• Besides, the bankers stretched the period of repayment of
loans to nine years with a two-year moratorium, cut the
interest rates, and sanctioned a fresh loan.
• However, a breather on loan repayment wasn’t enough to
revive Kingfisher Airlines, which continued to bleed with every
passing year.

18. • In reply to one such question in 2011, Namo Narain Meena,
former minister of state of finance, said Kingfisher Airlines had
pledged its brand to banks for an estimated Rs 4,100 crore.
• Meena also said Mallya had given a personal guarantee of Rs
248.97 crore while United Breweries Holdings has provided a
corporate guarantee of Rs 1,601.43 crore.
• In addition, Kingfisher has provided a pooled collateral
security of Rs 5,238.59 crore, which includes Kingfisher House
in Mumbai, Kingfisher Villa in Goa, and hypothecation of
helicopters.
• Besides, the pledged securities include ground support and
other equipment (Rs 101.58 crore), computers (Rs 22.43
crore), office equipment (Rs 13.39 crore), furniture and
fixtures (Rs 33.35 crore) and an aircraft (Rs 107.77 crore),”
Meena had said. In short, Mallya had pledged all of
Kingfisher’s movable assets.
• But that didn’t stop Mallya from drawing huge salaries from
Kingfisher — Rs 33.46 crore each in 2011 and 2012, according
to some reports.The official spokesperson of Mallya declined
to comment for this story.

19. • In 2012, Kingfisher Airlines was grounded, leaving its
employees with unpaid salaries.
• The company had allegedly not deposited its employees’
provident fund to the government and had run losses in
excess of Rs 4,000 crore in 2012-13.
• Its accumulated losses ran into Rs 16,023 crore, while its net
worth fell to a negative Rs 12,919 crore at the end of March
2013.
• In April 2015, Mumbai International Airport Private Limited
(MIAL) sold Mallya’s personal aircraft (its registration number,
VT-VJM, matches his initials) for Rs 22 lakh to recover airport
dues of the grounded airline.
• As trouble mounted, Kingfisher Airlines was chased by the
service tax department over non-payment of service tax of
over Rs 115 crore.
• The department seized eight aircraft and helicopters of the
company, including Mallya’s prized Airbus A319, which it now
plans to auction.

20. • On March 7 this year, the service tax department moved the
Bombay High Court, asking for impounding of Mallya’s
passport and seeking his presence in the ongoing court case.
• The airlines had also defaulted on crediting over Rs 372 crore
of Income Tax deducted at source from employees.
• In February 2013, the airline’s flying permits were withdrawn.
But Mallya didn’t give up.
• “Although KFA’s licence has expired on December 31, 2012,
under civil aviation regulations, KFA has a period of 24 months
to reinstate the same.
• A revival plan has been submitted to the DGCA which is under
consideration. Further, discussions are in progress with some
prospective investors for restarting the airline operations,’’
Mallya said in the 2012-13 annual report of UB Group
(Holdings) Ltd, the holding company for Kingfisher Airlines.

21. • “The Income Tax authorities attached all our bank accounts
and our main IATA collection account, with the result that we
are completely crippled and have been unable to make any
payments to any party including salaries to 8000+
employees,’’ Mallya said in the March 9, 2012, letter to the
CBDT chief.
• The letter went on to say: “The Government of India (is)
reportedly taking several policy initiatives to help the stressed
aviation sector. This will help the industry and also Kingfisher
Airlines. We are in active discussion with serious investors and
are confident that we can introduce fresh equity and
recapitalise Kingfisher Airlines in the near future.”
• In 2013, when a consortium of 14 banks led by the SBI
approached UBHL for payment of what was then an
outstanding of Rs 6,493 crore in loans to Kingfisher Airlines,
Mallya wrote back saying a significant amount would be
settled when British alcoholic beverages giant Diageo Plc buys
stake worth nearly Rs 5,000 crore from UBHL and others in the
Diageo-Mallya owned United Spirits Limited (USL).

22. • In July 2013, UBHL and Kingfisher Finvest India sold USL stake
then worth around Rs 2,400 crore to Diageo, but in December
that year, a division bench of the Karnataka High Court
annulled the deal on a plea by the consortium of banks that
the sale of UBHL stake in USL to Diageo was contrary to
agreements between Kingfisher Airlines and its creditors
where UBHL is the guarantor.
• The matter is now before the Supreme Court, and Diageo,
Mallya’s companies and their lenders agreed in November
2015 for the dozens of petitions in the matter to be heard in
April 2016.
• The Supreme Court has assigned April 6, 2016, as the tentative
date for this matter.

23. Wilful Defaulter
• United Bank of India was the first lender to declare Kingfisher
and Mallya a ‘wilful defaulter’ in May 2014.
• The same year, the SBI too issued a notice to tag Kingfisher
Airlines, Mallya and United Breweries Holdings as ‘wilful
defaulters’.
• The SBI notice of August 19 has alleged diversion of funds by
Kingfisher Airlines to UB Group of companies and other firms.
• Mallya has challenged the decision of United Bank and the SBI
in various courts.
• In February, Punjab National Bank, another lender, declared
Mallya and Kingfisher a wilful defaulter.
• According to a senior bank official, who did not want to be
named, banks have conducted over 500 hearings with top
Kingfisher company officials on loan recovery but very little
came of these meetings.

24. • Mallya is currently fighting at least 27 cases in various courts.
Of these, at least 22 are related to loan default by Kingfisher
Airlines — an amount that stood at Rs 9,091.40 crore at the
end of November 2015
• Meanwhile, Mallya’s troubles have only been growing. In
February this year, the board of United Spirits Limited (the
company his father set up) asked him to resign as chairman
after an internal probe alleged financial irregularities.
• Vijay Mallya left the country on March 2, the day public sector
banks, to whom he owed an estimated Rs 9,091 crore in loans,
moved the Debt Recovery Tribunal against him.
• Attorney General (AG) Mukul Rohatgi told that "I spoke to the
CBI little while ago and it told me that on March 2 he (Mallya)
left the country”
• AG also told that"if he is already out of the country, we will
permit you to serve the notice through Indian High
Commission at London and also through his official email ID of
Rajya Sabha, of which he is a member."

25. • The court has also raised some unsavoury questions to the
banks that have approached. It asked why loans were given to
Mallya when he was already a defaulter and was facing
proceedings in the court of law.
• Mallya announced his intention to shift to the UK
• The consortium of banks, meanwhile, filed their appeal in the
Court but now it seems this was bit too late. Besides SBI,
other banks which have moved the SC are: Axis Bank Limited,
Bank of Baroda, Corporation Bank, Federal Bank Limited, IDBI
Bank Limited, Indian Overseas Bank, Jammu and Kashmir Bank
Limited, Punjab and Sind Bank, Punjab National Bank, State
Bank of Mysore, UCO Bank and United Bank of India.

26. Conclusion
• Mallya, whose now-defunct group company Kingfisher Airlines
owes over Rs 9,000 crore to 17 banks, had left the country on
March 2 and is in the UK

27. Reference
• http://www.iloveindia.com/indian-heroes/vijay-mallya.html
• https://en.wikipedia.org/wiki/Vijay_Mallya
• http://notjustrich.com/vijay-mallya-the-king-of-good-times/
• http://indianexpress.com/article/india/india-news-
india/sunday-story-once-upon-a-time-there-was-a-king-vijay-
mallya/
• http://www.firstpost.com/business/confirmed-vijay-mallya-
has-left-india-and-probably-with-40-mn-in-pocket-sc-issues-
notice-2665296.html

28. Thank You