Vijay Mallya: Financial Fraud

Is it a criminal offence to default on loans? Case study of Vijay Mallya-
This case talks about Vijay Mallya. Vijay- Mallya was born in the family of Vital Mallya. Vital Mallya's
actual business was in company United Breweries. However, the actual founder of UB was Thomas
Leishman.
Vittal Mallya joined the company at 22 and started acquiring stakes of the company. First he
became the director of the company and later on the chairman of the company.
After becoming chairman of the company, he put his hands on different business like polymer
,battery, pharma etc. He had soaring ambition. After VM's father death he became the chairman of
the company.
And then he put his hands on different business like engineering related, education related but then
he realized the main profit lies in liquor business so he concentrated on United Breweries. Slowly
and Slowly under his supervision company reached new height. He started too work very hardly for
this company and in sometime his company (UB) became 2nd most popular liquor business.
In India liquor advertisement was banned so he promoted his company by his lifestyle, calendars and
events to promote kingfisher brand and because of all this Kingfisher brand became very popular.
On the occasion of VM's son birthday he launched Kingfisher airlines. On kingfisher airline he
focused on making very luxurious and pleasant trip. He also told his employees to treat their
customers as guest and give them luxurious facilities. The customer also started to comment
Kingfisher as very good airline. Airline business is a capital intensive business and requires a lot of
capital.
VM decided to make his airline as international airline. International flight requires 5 years of
domestic experience but kingfisher was lacking it by 3 years as it was started only 2 years ago. So to
manage these things he bought another airline company Air Deccan which had completed 4 years
and was on the verge of going bankrupt. He started to use this airline as the name of Kingfisher Red
and the price of ticket was relatively low in comparison to Kingfisher.VM wasn't found of ordinary
things. He slowly started to add luxurious thing to flight and increased the ticket price but still it was
low.So people started to take this flight as it was cheap and luxurious. As time passed and luxurious
facilities added more to its price . People started flying from different flight and at the same time
price of crude oil increased exponentially to 140$ per barrel also value of rupee was declining and
india was going under recession . So he approached to foreign investors but FDI wasn't allowed in
India at that time . So he started flights on the routes where very less flight fly. But this plan was also
unsuccesful and lead to closing of Kingfisher RED.
And employees of Kingfishr Airline were also upset as they didn't got their salary since 7 months and
VM was doing photoshoot with models for his Calendar at that time.
He had taken lots of loan for his airline business on his personal guarantee and was unable to repay
it. So a meeting held between VM and bank in which he agreed to give 6600cr but bank denied and demanded for 9000cr. This led to closing of Kingfisher airlines and Soon VM flee away from India to
Britain and he became king of bad time from king of good time.
One of the loans was sanctioned by Public Sector Bank IDBI when Kingfisher was nearly bankrupt.
Later on the manager was held and put behind the bars.VM took advantage of access to Parliament.
He discussed informally with Union Finance Minister Arun Jaitley, within the corridors of Parliament,
the possibility of convincing banks to settle with Kingfisher Airlines. The Finance Minister claims to
have denied his request as it was not made according to formal protocols. Immediately after this,
Mallya fled the country.
As we know one of the loan was provided by Public Sector Bank and this work from the taxpayers of
our country. So all the money gone with VM was our money. So it wasn't the lost of just bank but
ours also. Government is also responsible for this activity as they deliberately allowed the
transaction of loan when kingfisher was nearly bankrupt.
In this case although the government bodies are also responsible for this but we should also
consider that the money that the government lost was ours money too and if it can be brought back
then the country can show some improvement but it has not been done till yet and no one is raising
voice for it, as we are the citizens of India so we should also raise our voice against the crimes like
this not just for country but for ourselves too because this is ours money and it can decrease poverty
and will stop crime like this to happen in future.