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Not a wilful defaulter, will pursue legal remedies, says Mallya


Mangalore Today News Network

Bangalore, Sep 05, 2014, DHNS:  Squarely denying the allegations by creditor banks of being a wilful defaulter, Kingfisher Airlines (KFA) promoter Vijay Mallya said on Thursday at the annual general meeting of United Breweries Ltd (UBL) and Mangalore Chemical & Fertilisers that he didn’t want to indulge in speculation and would take each case as it comes.

Vijay Mallya“We strongly deny the allegations and disagree with the findings of their grievance redressal committee… will pursue all legal remedies available. I have great faith in the judicial system of our country,” the UBL chairman said, adding that there is no question of his vacating the charimanship of UBL and United Spirits Ltd (USL).

Mallya is a minority shareholder in UBL and USL which are controlled by Heinken and Diageo respectively.

In response to United Bank of India (UBI), of its creditors, declaring the Mallya a “wilful defaulter”earlier this week, UB had in a statement strongly denied the bank’s claims and disagreed with the findings of the grievance redressal committee. A UB spokesperson declined to comment on UBI declaring the airline a “wilful defaulter” earlier this week.

State-owned UBI is the first lender to declare KFA and promoter Mallya as wilful defaulters. Besides Mallya, the bank, which has an exposure of between Rs 350 crore and Rs 400 crore to KFA, declared three directors of the airlines — Subhash R Gupte, Ravi Nedungadi and Anil Kumar Ganguly — on the defaulter list. The loan was extended by the Bangalore branch of UBI.

About the UBI executive director’s statement that UB Group was given time to present its case, Mallya said, “I cannot get into media debate on what the United Bank of India executive director has said. We were not given hearing, we have not appeared before them, we disagree with their action, and we shall pursue with legal remedies.”

Concerns on debt

Mallya brushed aside speculation that UB’s joint venture partners, Heineken (in United Breweries) and Diageo (United Spirits Ltd) have raised concerns on the group’s growing debt pile. “They have not raised these issues with me,” he said.

When Mallya’s attention was brought to the issue of liquor being brought under the Goods and Services Tax, Mallya said he was in favour of such a move.

“It is a very large industry, very large employer, as well as one of the highest contributors to state revenues. Excluding beverage alcohol from GST would have very large financial impact on the industry,” he said.

Commenting on the prohibition campaign initiated by the Kerala government, he said each state has a right to impose whatever policy it chooses, particularly on the alcoholic beverage industry. He said that such measures had in the past not yielded results for those imposing them.

"There is sufficient evidence to prove prohibition has not succeeded anywhere, not even in countries like the United States. Prohibition also leads to ill-effects such as smuggling across borders, illicit and spurious production of alcohol," he said. On United Spirit’s plans to institute an inquiry into loans advanced to different entities of the UB group, Mallya said, "I was part of the United Spirits Limited board meeting yesterday.

 I know exactly what comments were made. Once again, there has been a proper inquiry instituted under the charge of the managing director and the CEO, and let the inquiry be conducted and the results will obviously be known.”


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