SBI contests Mallya firm's claim in tribunal case

The State Bank of India (SBI) on Wednesday objected to the claim of Rs.594 crore by Vijay Mallya-controlled United Breweries (Holdings) Ltd. which it recovered by selling the UB's shares pledged against loans given to his now-defunct Kingfisher Airlines Ltd.

Filing counter-objections in the Debt Recovery Tribunal here to the UBHL claim made on April 5, the bank's counsel said the claim was a tactic to delay justice in Mallya's Rs.9,090-crore loan case of a consortium of banks, including the SBI, before the tribunal.

"The claim on the amount at this stage is a deliberate attempt to delay our case for recovering the loans given to the holding company of the airline," SBI counsel said.

Admitting the bank's objections, tribunal presiding officer C.R. Benkanahalli posted the case to April 21 for further hearing.

The SBI recovered Rs.594 crore by selling 2.6 million equity shares of the 3.5 million shares of United Spirits Ltd. (USL) the holding firm pledged with it for lending Rs.1,600 crore to the airline.

The bank sold the shares in April 2013 at Rs.1,836 per share after the airline and its holding firm (UBHL) failed to repay the loan amount due by then.

"The holding firm should have filed its objections on or before May 6, 2014, and not in April 2016 when the loan recovery case was at the stage of final hearings," counsel submitted, justifying the bank's decision to sell the shares as per the norms of the Recovery of Debt due to Banks and Financial Institutions Act, 1993, (RDDBFI Act).

Contesting the bank's decision to sell its pledged shares in April 2013, UBHL said it suffered a loss as they were sold at a far lower price than their value, which touched a high of Rs.4,080 per share in April 2015.

In a related development, the consortium petitioned the tribunal to attach sale proceedings of Mallya's corporate jet (Airbus A319-133ACJ) from auction the service tax department is conducting on May 12-13 at Mumbai airport to recover Rs.370 crore the airline owes it from its commercial operations from 2009-2012.