Abstract
This paper is about Money-laundering case of Vijay Mallya.
Background:
Vijay Vital Mallya (VM) was born to industrialist and business tycoon Vital
Mallya in 1955.
He went on to take over his father’s business (UB Group) in 1983 at the young age
of 28.
VM had soaring ambition.
He always looked for opportunities to expand his father’s existing business and
wish to make this business globally.
Business Background:
As he was the son of business tycoon Vital Mallya it was easy to enter in the UB
Group after death of his father.
Due to his huge efforts he capture the market and own 50% share in the market
And they are available in 52 countries outside the India.
United Spirits, the flagship company of UB GROUP become the 2 nd largest alcohol
beverage company in the world.
But he is not satisfied of being king of alcohol.
He started limited edition of Kingfisher calendar in 2003. He then started Sahara
Force India (Formula one team) in 2007.
Forbs rank Vijay Mallya as 40 th richest person of India.
California University gave them Doctorate in Business Administration.
They brought the Royal Challenges Bangalore team in 2008 under the UB Group.
They made branding of kingfisher everywhere from his villa to each business name
and made ‘KINGFISHER’ brand.
All of this going so good.
What mistake did Mallya did?
In the 2005, he made the Kingfisher Airline providing the best luxurious high class
travel.
He wanted to start international flights as well but as per the government of India
rule he has to wait for 5 years so he decided to buy an International Airline
Company Air Deccan in 2007 and give name as kingfisher red.
In 2009 even Kingfisher got permit for the international services but there is no
synchronization between the two.
Both used to have flight at same time slot and kill the each other’s market. The
tickets of kingfisher red were so cheap as compared to kingfisher. So market share
of Kingfisher were goes down.
So Mallya decided to shut down Kingfisher Red.
What went wrong with kingfisher Airlines?
Kingfisher airline has no future vision and strategy.
They started as luxury airline but suddenly falls to the low cost airlines and leaving
there happy customer into unsatisfied one.
To cope up with the loss Kingfisher started taking loans and by 2010 Kingfisher
Airlines debt has heavily increased .
It has taken 9000 crore Rs. of loan from different banks but most from SBI and
IDBI Bank of about 1600 and 800 crore Rs. respectively.
By 2011, fuel prices have been increased and Kingfisher was unable to pay the fuel
companies.
The companies even refused to pay employees salary so within few months
employee started working in another companies.
In 2012, SBI declared Kingfisher as Non-Performing Assets, finally by October
2012, Kingfisher Airlines has to close the business.
Vijay Mallya was in huge trouble then he completely refused to repay the loan.
He claims that he had offered the bank to repay the settlement of 4000 CroreRs.
but the bank refused that they wanted the complete loan recovery and interest.
Conclusion:
He was currently living in the UK , the procedure of getting him back to India is
going on by government of India.
As Bank is refused for settlement of paying principal amount of loan to bank by
Vijay Mallya in feb 2020.
But the real question is that recovery of money is possible by Government or not.
