Wilful defaulter issue misplaced, says Mallya

The efforts by various lenders to term him a 'wilful defaulter' are "misplaced", UB group chairman Vijay Mallya said. Speaking to the shareholders of UB Holdings (UBHL) and United Spirits (USL) on Tuesday, Mallya said the Calcutta High Court's granting Kingfisher Airlines a stay against United Bank of India's move to tag Mallya as a wilful defaulter lends credence to his stance.

"The move by United Bank of India pushing to put that tag of wilful defaulter on me as well as the other two directors of the Kingfisher Airlines board was done in haste. After we got a stay in the Calcutta High Court, the Kerala High Court has also given us a stay on Monday against a move by Federal Bank to bring us under the wilful defaulter category," he said, adding he has already got a stay at Delhi High Court on a similar move by Punjab National Bank.

Mallya said he was being advised by lawyer Harish Salve.

"We have studied and analysed the master circular of RBI on wilful defaulters. It applies broadly if company misuses loans for some other purpose, diverts to other activities or which borders on criminal intent. None of these factors applies as UB Holdings as promoters of Kingfisher Airlines have ourselves infused equity close to Rs 3,200 crore to Kingfisher Airlines. If we had to divert, why should we have invested," Mallya told shareholders.

Mallya also sought to assuage the fears that there aren't any differences between UB Group and Diageo, which has a 54 per cent stake in USL. "An inquiry has been constituted to assess on how USL can get back the Rs 600 crore lent to business associates of USL. A fair inquiry will be conducted into that aspect," said Mallya. On United Spirits giving a loan of Rs 1,300 crore UB Holdings and on which USL has made provisions of Rs 330 crore, Mallya said it was a bonafide transaction authorised by the two boards of UBHL and USL. He added that UBHL would take all steps to honour its commitments.