Dinesh Kamath's Editorial 'Fraud or Business Failure?' that was published in Newsband

Fraud or Business Failure?

Businessman Vijay Mallya is now fighting India’s extradition case in the courts in Britain, two years after arriving there. He claims that the case against him is “politically motivated” and allegations are “blatantly false”. Mallya highlighted his attempt to sell ₹13,900 crore of assets to repay creditors, including the banks. He had written to Prime Minister Narendra Modi and Finance Minister Arun Jaitley expressing his pain at being accused of looting public money and fleeing the nation.

Mallya insisted the approval process for the loans had been “appropriate” while their restructuring under a master debt cast agreement in 2010 had happened with the RBI’s permission. The failure of Kingfisher Airlines had been due to circumstances beyond its control, and he had attempted to hold settlement discussions with the bank’s top management. His conduct obviously does not amount to ‘willful default’.

He claims that the non-payment of salaries did not go unnoticed by him, pointing to a 2014 application to the Supreme Court to pay part of the salaries of KFA employees.

His barrister Clare Montgomery has said that the whole case has been politicised by the BJP, Congress, and Shiv Sena and they all treat it as an opportunity to make political capital on the assumption there was fraud. Is it a case of fraud or business failure? Everyone wants the answer to this question.  

The news report about Vijay Mallya terms charges politically motivated seems to be justified considering that this gentleman is unlike Nirav Modi and his uncle Choksi who have swindled the Punjab National Bank of several crores but now refuse to come back. Whereas in the case of Vijay Mallya, he did not get a reply to his letters addressed to the Finance Minister as well as to the Prime Minister which was rather disappointing. According to him, he is definitely having a good intention to pay back all the money to various banks that he owes but is being prevented to get sale of his 13 crore assets which is hindering his moves. He is right in saying that he is being made as a poster boy. So the concerned authorities and the Government should consider his case genuinely.

It appears that Vijay Mallya was honest and PM/FM in collusion with investigating, tax and bank authorities have made him to be dishonest. This case needs to be solved step by step. Legally it is simple: Did Mallya give or imply personal guarantees? Financially it is simple: Does he have or can he raise Rs. 9,000 crores? Also did he commit fraud by bribing the bank officials? Finally did the Bank officials cheat their own bank? Prime Minister Narendra Modi should let this case come to a conclusion quickly.  

Mallya confesses to having the property worth Rs 13900 cr and that he is willing to pay the loan of Rs 9000 cr. Then why is Government of India making Mallya’s life difficult? Is it personal or business?