Liquor baron Vijay Mallya, who owes Rs 9,000 crore to a group of public sector banks, made public a letter he sent to the Prime Minister and Finance Minister in which he sought “patience and understanding of the severe predicaments that I am currently facing” and said he is offering to settle with the lenders.
Here's the full text of the letter he wrote to PM Modi.
Member of Parliament - Councii of States
Chairman - The U8 Group
15 April, 2016
Shri Narendra Modi
Honourable Prime Minister
Government of India
Respected Prime Minister:
Since assuming office, you have launched several unprecedented Initiatives giving renewed hope to hundreds of miilions of Indians and enhanced the stature of our Nation amongst the Global community.
I have witnessed various administrations over the past three decades since I was appointed Chairman of The U3 Group at the age of 28 following the untimely death of my father in 1983.
I would like to congratulate you for the path breaking initiatives you have taken and to wish you all the best in leading our Nation to greater heights.
Over the last three decades I have had the satisfaction of building the World's largest Spirits Company by volume (United Spirits Ltd) and India's largest Brewing Company (United Breweries Limited) which together have contributed Iakhs of crores in duties and taxes to State public exchequers and provided employment to hundreds of thousands of people with a manufacturing network of over 100 factories in India.
In addition we have taken over sick industrial enterprises (Hindustan Polymers Ltd and Mangalore Chemicais and Fertilizers Ltd) and successfully rehabilitated them for the benefit of all stakeholders including Public Sector Banks who were lenders.
Our Group's core businesses In Beer and Spirits have a flawless track record of dealings with all banks including Public Sector Banks and this can be independently verified.
As a non-resident Indian since 1988, I also successfully developed a global business in alcoholic beverages, paints and hospitality.
Most unfortunately, nothing I have stated above is either understood, appreciated or brought into the public domain by the media.
I seek your patience and understanding ofthe severe predicaments that I am currently facing and appeal to your good sense ofjustice so that I am treated in a fair manner. I am pained to see that I have become the poster boy of all Bank defaults, accused of looting public money and fleeing the Nation.
I have also become a political pawn about whom politicians across Party lines make reference to in public statements to either influence the electorate or set an example before several other industrialists whose Companies are facing financial stress.
In addition, every Government agency - The Central Bureau of Investigation (CBI), The Serious Fraud Investigation Office (SFIO) and the Enforcement Directorate (ED) have started investigations against myself. Just today I received a communication from The Ministry of External Affairs suspending my Diplomatic passport for four weeks and giving me one week to
show cause why my passport should not be revoked. This has severely hampered my ability to raise funds to repay Banks as further explained below.
I left India, as scheduled on March 2nd to attend to my commitments as an International businessman and this has been misconstrued as deliberate.
In 2004 we launched Kingfisher Airlines and within a few years grew to become the largest domestic Airline operating more than 480 daily flights and providing first time connectivity to small towns not ever served even by Indian Airlines. Kingfisher Airlines, therefore, was an important public utility service which directly employed 8500 people and provided indirect employment to a further 4000 people.
Kingfisher Airlines was truly a World Class airline and the recipient of numerous National and International awards.
Unfortunately, the macro economic environment and then Government policies conspired against us and Kingfisher Airlines was forced to shut down operations in October 2012.
It is important for me to bring the following pertinent facts to your attention.
tax on Aviation turbine fuel (ATF) whose prices were directly based on international crude
Indian Airlines (Air India).
As you will see, I made every possible effort to save Kingfisher Airlines including investing more than Rs 4000 crores which, sadly has been lost. This was a genuine business failure caused by circumstances beyond control.
The total borrowings (Principal amount) of Kingfisher Airlines including from Public Sector Banks was Rs 5100 crores. These commercial loans were sanctioned after detailed assessment by all Banks of the Company's financial position. Compound interest has been calculated but has not been applied as per Court filings made by the Banks.
The Public Sector Banks are vigorously pursuing me personally for recovery due to my purported personal guarantee and the purported guarantee given by United Breweries (Holdings) Ltd given towards the Kingfisher Airline borrowings. The media, various political personalities and Government agencies are accusing me personally of having "stolen" or "diverted" funds which is wholly incorrect.
I have good reason to believe that the Government agencies - CBI/SFlO/ED are now dealing with me in a highly prejudicial manner despite full cooperation. It has been further stated that I have personally brought the private sector into disrepute which only confirms that l have become the poster boy of all loan defaults in India without having borrowed a single rupee myself. This public outcry with no factual basis seems to be influencing the Banks themselves notwithstanding the substantial settlement offer that I have made as explained below.
Whilst I applaud your Government's actions to curb black money, ensure compliance and bring defaulters to book, | appeal to you to ensure that this Is done in a fair and honourable manner.
The circumstances behind my purported personal guarantee are as follows:
personal guarantees. The letter from RBI is attached as Annexure 3.
Notwithstanding any of the above and in good faith, I (including on behalf of Companies under my control) have made a one time settlement offer amounting to Rs 4400 crores to State Bank of India which they have rejected, ignoring the important fact that several other secured and unsecured creditors have to be settled and paid as well.
I believe that I am being discriminated against and not being given an equal opportunity that other borrowers and Asset reconstruction Companies have been given by Public Sector Banks.
Having lost over Rs 4000 crores that was pumped into Kingfisher Airlines and with the settlement offer of an additional Rs 4400 crores. I and my group would have lost Rs 8400 crores pursuant to the genuine business failure of a public Company that was a victim of economic circumstances and then prevailing UPA Government policies.
As the head of Government, I would request you to please appreciate the facts that I have now placed before you.
I request you to appoint an Ombudsman or a committee to examine all the facts so that justice can prevail.
First Published: IST