Vijay Mallya was always known as someone who is filthy rich, lives a super luxury lifestyle, Liquor Baron, Business Tycoon, ‘King of Good Times’ etc. Now he has a new name ‘The Wilful Defaulter’. Mallya, the former chairman of United Spirits, owes over Rs 7,000 crore to 17 banks. SBI is leading the legal battle in the Supreme Court and Debt Recovery Tribunal against liquor baron.

Now, to get back to where it all started, Mallya launched Kingfisher Airline (KFA) in May 9, 2005 with much fanfare. Pitched as a premium brand, Kingfisher brought with it the idea of luxury, glamour and lifestyle. It targeted the high-end passengers of Jet Airways. Though KFA did not turn up any profits ever, he was overzealous about its future. He wanted KFA to be an international brand. The aviation policy in India is strictly guarded by the 5/20 norm which requires a domestic carrier to be operational for five years and have a fleet of 20 aircraft. To make his dream come true Mallya found a novel route. He bought near bankrupt Air Deccan, a budget airline, which fulfilled the 5/20 norm on June 2, 2007. Despite huge losses, in March 2010, KFA started international flights.  Right from the launch of KFA, Mallya was on the lookout for a big pocket investor who could share the burden of running a capital intensive airline operation. But the restriction on foreign investment in the airline industry hindered any possible investor. After years of posting losses and inability to pay employees, aircraft leasers, fuel companies, airport parking fees and service, debtors, KFA was grounded forever in October 20, 2012 when the aviation authority suspended its flying permit. Mallya had pledged the brand ‘Kingfisher’ and all its movable assets as security, but the banks couldn’t use these assets to recover their money due to grounding of KFA.

In 2013, when a consortium of 14 banks led by the SBI approached UBHL for payment of what was then an outstanding of Rs 6,493 crore in loans to Kingfisher Airlines, Mallya wrote back saying a significant amount would be settled when British alcoholic beverages giant Diageo Plc buys stake worth nearly Rs 5,000 crore from UBHL and others in the Diageo-Mallya owned United Spirits Limited (USL). Diageo acquired 27% stake in USL for Rs 6,500 crore, but KFA lenders did not get any funds. Then United Bank identified United Breweries Holdings as ‘willful defaulter’. Diageo asked Mallya to step down as chairman of the Indian liquor firm but as expected he refused. Banks moved debt recovery tribunal, which restrained Mallya from accessing Rs 515 crore he was to receive from Diageo as settlement after he later agreed to quit.

Mallya flew out of India last Wednesday with $40 million (around Rs 250 crore) part payment of the $75 million severance package from Diageo for resigning from the post of Chairman of the United Spirits Limited. The consortium of banks led by SBI moved to the Supreme Court seeking the freezing of Mallya’s passport, and ‘first right’ to the severance package money that he received from Diageo. This happened only after he had already left India.

Now the question is of the recovery of public money of nearly Rs 7,000 crore. Solution being offered is that Mallya must have given his personal guarantee in 2010 when the restructuring was done. If that is so, his personal assets can be identified and the DRT can be requested to attach them even before the judgment, if not done already.