The Mallya Doctrine: When in trouble, blame the media

A quick look at USL chairman Vijay Mallya's grouses and the facts on the ground

Following United Spirits’ Thursday board meeting to announce its results , a defensive Vijay Mallya in an interview with a leading daily sought to dismiss the various charges against him by blaming the media for distorting public perception about him. While we certainly don’t carry a brief for the entire media, it is a bit rich for the USL and United Breweries group chairman to blame it for all his troubles. Let’s take a look at some of the claims he made during the interview, and how they stack up against the facts:

 

1. “Don’t try to drive a wedge between us” 

 

Fact: The USL board has ordered an investigation into loans of around Rs 1,200 crore to UB group and associates, and has authorised managing director Anand Kripalu to take whatever steps he deems necessary for recovery, though the latter appears doubtful.  

 

Mallya’s take: “On what basis are you saying it's between Diageo and UB? We are partners together… So don't try to drive a wedge between us. … The board of USL decided to investigate further. It's you (the media) who perceives it as Diageo has instituted the inquiry.” While Mallya remains chairman and holds, along with other group companies, a stake in USL, they are hardly equal partners. Diageo holds 54.78% , making it the single largest shareholder. Mallya might like to window dress the probe by saying it is a joint issue, but the fact that the USL board considered it imperative to launch an investigation into why loans of hundreds of crores were made to another company he heads and associates is hardly a pretty sight. 

 

2. “If one bank squeals, it becomes headline news”

 

Fact: Mallya’s company, Kingfisher Airlines, owes the bank Rs 400 crore

 

Mallya’s take: While he does not directly discuss United Bank of India’s decision to declare him a wilful defaulter, he seems to be making an oblique reference to just that when asked about the future of UB Holdings, with foreign entities now in control of his two flagships. 

 

Mallya bristles about the fact that nobody acknowledges how he has unlocked shareholder value by bringing foreign partners on board -- which is true. But he then adds “These are ignored and seem irrelevant. But if one bank squeals, it becomes headline news.” 

 

Assuming he was referring to UBI, asking for repayment of Rs 400 crore is hardly a ‘squeal’. UBI executive director Deepak Narang has told Business Standard in an exclusive interview how Mallya had been given time and opportunity to explain his position but decided not to do so. 

 

3. “Unfortunately, there are many people who left the company a long time back, who took up other jobs, and are still staking claims.”

 

Fact: Hundreds of Kingfisher Airlines employees still haven’t been paid dues, some are still jobless, and at least one has committed suicide because of stress caused by unemployment and debt. 

 

Mallya’s take: This is probably the unkindest cut of them all. Asked whether the issue of non-payment of salaries to Kingfisher Airlines staff could have been handled better, Mallya claims there is no wilful denial on the part of the company, and that he is “hurt” by the perception that he is deliberately not paying salaries. 

 

These sentiments are of little consolation to employees like engineer Anjan Deveshwar who has not been paid for two years and is now planning to sell his apartment. Employees also discovered that the company had been deducting taxes from their salaries but not depositing it with the government. Under such circumstances, Mallya’s claim that it is staff who left the airline but are now asking for salaries cuts little ice.