The proposed severance pay of $ 75 million for the liquor baron Vijay Mallya has gained considerable media attention as lenders moved Debt Recovery Tribunal claiming ‘ first right on the payout from Diageo.’
This came after Karnataka High Court on Friday ordered issue of notice to Mallya, his defunct Kingfisher Airlines and nine other respondents on a petition filed by bankers, including SBI, seeking his arrest and impounding of his passport for defaulting on loans.
PTI news reported that thirteen bankers, including SBI had approached the high court seeking arrest of Mallya and impounding of his passport along with two other pleas after they moved the DRT to take up their pleas on a priority basis.
The DRT, meanwhile, has reserved its order on one of the four petitions filed by the SBI.
Mallya’s lawyer, Uday Holla, contended that his client could not be arrested because it would be tantamount to ‘demeaning’ the institution of Rajya Sabha because he is the respected member of the Upper House of Parliament.
Holla had earlier argued before the DRT that $75 million package for Mallya could not be attached because it was his client’s severance package after he signed a non-compete agreement under which Mallya would not enter into liquor business for the next five years.
The SBI has approached DRT seeking action against the UB Group promoter for defaulting on loans.
SBI, which heads the consortium of 17 lenders to the grounded Kingfisher Airlines, had moved DRT here against the airline’s chairman Mallya in its bid to recover over Rs 7,000 crore due loans from him.
DRT judge Benakanahalli, on priority basis, took up the application for securing a first right on the USD 75 million severance package that Mallya will be getting for quitting Diageo-owned United Spirits as its chairman last week under a sweetheart deal.
Holla has described his client as a ‘small time defaulter’ complaining the banks had ignored the big defaulters in the past.
Holla said, “Recently the RBI had said that these banks do not take action against large fries, but small fries. My client Mallya is a small defaulter compared to Ambani’s Reliance. Some of the companies have defaulted to the tune of Rs 40,000 crore, and nothing happens to them.”
Meanwhile, employees of the grounded Kingfisher Airlines have written open letter to Mallya accusing him of having blood on his hands.
Mallya’s Kingfisher Airlines shut operations in 2012 due to problems of credit and cash, leaving over $2 billion in debt, more than 1000 employees jobless and unpaid salary arrears of over Rs 100 crore. The salaries remain unpaid.
(Inputs from PTI and Economic Times)