Vijay Mallya had no intention of repaying bank loan, says CBI

Vijay Mallya,who stood as a personal guarantor for loans disbursed to the now defunct Kingfisher Airlines never intended to honour his commitment,much before the carrier began defaulting on the loans.

Kingfisher Airlines chief Vijay Mallya had no intention of honouring a personal guarantee he had given to IDBI Bank, even before his now defunct private carrier allegedly got involved in a loan default worth Rs 900 crore, according to a supplementary chargesheet filed in the case by the CBI.

The supplementary charge sheet, which filed was in connection with a Rs 950-crore loan from IDBI in Mumbai, says that Mallya tried every trick in the book to hide his own personal funds when IDBI began chasing him for the money.

The CBI alleged that Kingfisher Airlines Ltd, its corporate guarantor United Breweries (Holding) Ltd and personal Guarantor Vijay Mallya misled banks and obtained loans with the intention of cheating, reports Hindustan Times.

The agency claimed that evidence it had gathered showed that "Mallya and UBHL had dishonest intention not to repay the dues of the bank from the inception".

The charge sheet read that KFA were making false promises of equity infusion to various banks from as early as January 2006, without any real intentions of fulfilling such promises.

KFA needed another Rs 2,500 crore loan, of which a consortium of 17 banks sanctioned a loan of Rs 2,000 crore even after by 2009 Kingfisher had taken loans totaling Rs 4998.5 crore from various banks.

The CBI alleged that Mallya lied about inflated value of the Kingfisher Airlines brand. Mallya quoted Grant Thornton's highly exaggerated and inflated" KFA's brand value of Rs 3406.3 crore. He used it as collateral against a loan from SBI and "deliberately concealed" Brand Finance's valuation which said KFA was worth Rs 1,911 crore.

The agency further claimed that while availing loan from banks, Mallya offered 12 aircraft as security to get higher loans from banks. But the aircrafts were on lease and he would get ownership of them only by August 2015 while the deadline to repay the loan was January 2014.

(with agency inputs)