Govt seeks to amend legislation to prevent future 'Vijay Mallya' incidents

Mallya was charged with a penalty of Rs.9,091 crore in principal and interest owed to banks by his Kingfisher Airlines Ltd. Image Source: Reuters

Finance Minister, Arun Jaitley, on Wednesday while announcing the Union Budget for the year 2017-18 made an indirect reference to wilful defaulters like Vijay Mallya.

“In the recent past there have been instances of big time offenders including offenders fleeing the country to escape the reach of law. We have to ensure that the law is allowed to take its course. Government is therefore considering introduction of legislation changes and even a new law to confiscate the assets of such persons located within the country till they submit to the jurisdiction of the appropriate legal forum,” Jaitley said.

Kingfisher Airline was grounded in 2012 after seven years of operations, as it was weighed down by heavy debt, accumulated losses and unrest among unpaid employees.

In March last year, 13 creditor banks moved the Supreme Court on 8 March to restrain Vijay Mallya from leaving India and sought an arrest warrant against the businessman.

Mallya had flown out of India on 2 March and found refuge in Britain, England.

A series of auctions were held for Mallya’s assets including his Goa villa, his house in Vile Parle and his cars and jet. However, most of the auctions failed even after several attempts by the banks to lower the reserve prices of the assets.

In a recent string of tweets, Mallya blamed the then government for the failure of his airline as he said, “public funds were used to bail out state-owned Air India, but not the then "largest domestic airline."

“I begged for help not loans,” Mallya tweeted.

There were two attempts last year to e-auction Kingfisher House; however, it ended in failure as no buyer approached SBICap, which auctioned Mallya's properties on behalf of the lenders.

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