Banks to sell fugitive businessman Vijay Mallya’s United Breweries shares worth Rs 5,500 crore
Mallya has been facing the ED probe after Kingfisher Airlines, owned by him, defaulted on bank loans. While the ED and the CBI were investigating the matter, Mallya left the country.
FollowIndian lenders, led by State Bank of India, have initiated talks with SBI Caps to sell Vijay Mallya-owned shares in United Breweries. Mallya's 16.15 per cent stake in the UB group is valued at Rs 5,500 crore and will be sold via block deals.
Earlier in the week, the Prevention of Money Laundering Act (PMLA) court in Mumbai restored properties seized by the Enforcement Directorate (ED) from Mallya to banks that had granted loans to the liquor baron. Note that the ED had seized assets worth Rs 9,000 crore from the former UB group chairman in connection with money laundering.
ED had earlier attached properties in the case and a consortium of banks had been claiming the same for debt recovery. Banks had filed for recovery in DRT (Debt Recovery Tribunal), Bangalore for which an order was issued in favour of the banks, but the ED had initially opposed the order. However, the financial probe agency later said it had no objection, following which the PMLA court issued an order on May 24.
Mallya has been facing the ED probe after Kingfisher Airlines, owned by him, defaulted on bank loans. While the ED and the CBI were investigating the matter, Mallya left the country.
A source said banks would be able to sell shares to recover their dues in the ongoing quarter. In the past, Mallya had said that he made several offers to banks to settle the matter and that the ball was in the lenders’ court.
"Banks will like to recover dues from Mallya as soon as possible," he was quoted saying. Mallya's stake in various companies (which was kept as collateral with the banks) would be sold through block deals to get better value. "SBI Capital markets would be acting as a bridge between us (lenders) and prospective buyers of these holdings," the official added.
According to a report on Business Standard, the PMLA court said in case Mallya was found not-guilty later, the banks would have to restore the properties back to Mallya after recovering their dues. The banks had earlier moved the Debt Recovery Tribunal in Bengaluru, which had allowed banks to sell Mallya's properties. The ED, which had attached these properties including stakes in UB group companies, had objected to the sale and moved the PMLA court in Delhi.
Vijay Mallya's run-ins with lenders began after the collapse of now defunct Kingfisher Airlines, over a decade ago. In 2013, a consortium of banks, including the SBI, had asked for a payment of over Rs 6,000 crore in loans for Kingfisher Airlines.
The interest on loans accumulated with total dues crossing over Rs 9,000 crore (2016).
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