MCA to question Mallya on Kingfisher staff dues

The Ministry plans to quiz Mallya on his plans to pay out pending salaries to Kingfisher Airlines' employees

The Union ministry of corporate affairs (MCA) plans to question Vijay Mallya, chairman of the UB group, over non-payment of wages to the staff of grounded Kingfisher Airlines Ltd, part of the conglomerate.

Sachin Pilot, the minister, has instructed Mallya be written to for details and on steps taken to remedy the situation, according to two people familiar with the matter.

Kingfisher staffers have not been paid for 17 months. Some of them in Delhi have begun an indefinite hunger strike, at the Jantar Mantar public protest venue. Some of them had met Pilot and asked for intervention. The employees had also approached many political parties, most recently the Aam Aadmi Party.

MCA is primarily concerned with administration of the Companies Act, allied laws and regulations on functioning of the corporate sector.

In an email reaction to the staffers’ hunger strike, the Kingfisher management there was no revenue or income from operations. “We can only reiterate that we are doing our best to revive the airline and raise necessary funds to pay the employees. We sincerely hope the employees will not continue with their extreme action of hunger strikes and any other extreme steps, including the ongoing agitation at Jantar Mantar,” a company spokesperson said.

Kingfisher stopped operations in October 2012. It has been repeatedly insisting it is attempting a revival before the deadline for renewal of its licence comes to a close at the end of 2014. Mallya presently claims there is an investor keen on the airline, conducting a due-diligence before making an investment.

Meanwhile, Kingfisher’s promoter, UB Holdings (of which Mallya is chairman) has sought permission of the high court here to pay a month’s wages to the employees on humanitarian grounds, despite no legal obligation to do so. However, creditors to the company have opposed any use of funds by the company for any purpose until their dues are cleared. UB Holdings is being sued over  corporate guarantees given for loans of Rs 6200 crore given to Kingfisher Airlines and about Rs 600 crore in five winding up cases against the company.