Vijay Mallya's sole regret: Kingfisher not flying when oil is cheap

New Delhi: With banks going after him to recover unpaid loans given to long-grounded Kingfisher Airlines, beleaguered businessman Vijay Mallya remains defiant and says the "only regret" he has that the carrier is not flying when the oil price has dipped so low.

"I have no regrets as such. Perhaps the only regret is that Kingfisher Airlines is not flying today when the oil price is so low," Mallya said. Global crude oil prices have fallen by almost 75 per cent from the peak seen in mid-2014.

While airlines in India still complain that the fall in crude prices has not got translated fully in the aviation fuel prices, their fuel cost has still come down by 30-40 per cent.

Most airlines reported better financials in the last quarter on account of low oil prices. Mallya, widely known as the 'King of Good Times' in his heydays, had to quit recently as Chairman of United Spirits—a company founded by his family in which he sold majority stake to UK-based liquor giant Diageo.

As part of the deal that also ended a yearlong boardroom battle at United Spirits, Diageo has agreed to pay Mallya USD 75 million. The settlement was sealed even as at least three banks including state-run giant SBI declaring Kingfisher, Mallya and his group holding firm UBHL (United Breweries Holding Ltd) as 'wilful defaulters' to recover unpaid loans amounting to thousands of crores of rupees.

Once billed as the most luxurious airline, Kingfisher had to be grounded in October 2012 after it landed in a major financial crisis with huge loans and payment defaults including to the oil companies and airports.

When asked about his long professional journey, Mallya who inherited the UB Group from his father as a young 28-year-old,said he has got "nothing to prove".

"I built India's biggest beer company. I built India's biggest spirits company. Okay, Kingfisher Airlines went wrong. But there is a whole list of reasons why it went wrong," Mallya told PTI in an interview days after Diageo settlement.

"Aisa nahi ki bewakoofi se band ho gaya (it did not shutdown for some stupid reason)... There were genuine reasons. It did not go well. You experience ups and downs in life... (but in the end) I have enough to be proud of," he said.

Mallya, known for his flamboyance and lavish parties, also brushed aside the criticism about he deciding to spend more time in England after Diageo deal."... I have had my residence in England (for a long time)... So what is new? All I have said is that I would like to spend more with my family," he said.

State Bank of India yesterday approached the Debt Recovery Tribunal seeking action against the UB Group promoter for defaulting on loans, including his arrest and impounding of his passport.

SBI, which heads the consortium of 17 lenders to Kingfisher, has moved the Tribunal in Bengaluru against the airline's chairman Mallya in a bid to recover over Rs 7,000-crore dud loans from him.

Besides SBI, Punjab National Bank and United Bank have also declared Mallya, his group holding company UBHL and Kingfisher Airlines wilful defaulters.

As part of Diageo deal, Mallya has also relinquished his position to control IPL franchise Royal Challengers Bangalore. However, he has been appointed Chief Mentor of the team and his son Siddharth has become a director.

While he has already asserted that remains in charge of his other sporting interest, the Force India Formula 1 team, Mallya said he will remain actively involved in the running of RCB.

"My son is a director and I have been appointed Chief Mentor. What does that mean? If I am going away why should I be Chief Mentor? I will be part of the planning and I will be around during the tournament. In my statement, I have said that I want to win the IPL trophy. If I am not associated at all, why would I make that statement," Mallya said.

The lenders are now eyeing the Rs 515-crore bounty sealed by Mallya as part of a 'sweetheart deal' with Diageo to exit United Spirits.Diageo has in return agreed to absolve Mallya of all his "personal liabilities' with regard to alleged financial irregularities relating to dealings with UB Group entities.

Diageo is the majority shareholder of USL with a 54.78 per cent holding, excluding the 2.38 per cent owned by the USL Benefit Trust. Mallya personally held a small stake of 0.01 per cent in USL at the end of December 2015, while his group firms owned further 3.99 per cent stake. However, more than half of these shares are pledged with banks.

In case of Kingfisher, the trading in its shares have been suspended for long due to its non-compliance to various listing requirements including its failure to make timely disclosure of shareholding data and other details.

As per the latest shareholding data disclosure till September 2014, it had over 2.33 lakh small retail investors, over 6,200 HNIs, 13 banks and other domestic financial institutions, as also five promoter entities.

Ironically, the number of public shareholders across all categories is higher than the levels before the airline was grounded in October 2012. The total number of public shareholders has gone up during this period from 2.1 lakh to over 2.4 lakh.

The company now commands a market cap of just about Rs 110 crore, as against that of close to Rs 10,000 crore before it landed in financial mess leading to its grounding.