 "Vijay Mallya")
A lot of people across the country are going to be very angry today. As they should be. The most shining example of crony capitalism in the country – Vijay Mallya – has just bought himself the sweetest possible deal in the history of corporate India.
In return for racking up Rs 7,200 crore in what Diageo calls ‘financial irregularities’ to feed his lifestyle, most of it using taxpayer money, the so-called King of Good Times is now being paid Rs 500 crore to go quietly into the night.
That’s right, that’s Rs 100 crore on average every year to go and live in the United Kingdom and not to compete with Diageo in any global market, except the UK where he will no doubt continue living the good times, may be, while Indians sip on his market-leading beer that tastes little better than, well… let’s not go there.
What is galling in all this is how one man single-handedly racked up thousands of crores in debt at Kingfisher Airlines and continued to live the high life, while his mostly- middle- and lower-class employees didn’t even get salaries for months on end. At least one person, the wife of a KFA employee, committed suicide because of the financial distress caused by non-payment of wages by Mallya.
Meanwhile, Mallya took on the tone of a haughty aristocrat, saying employees who are stuck with the airline had passed a ‘“true test of loyalty, dedication and commitment” and would be ‘rewarded’. Those rewards are now clear for all to see. Rs 500 crore for himself and his progeny, with not a penny for those who gave years of their lives to his company. It is difficult to think of a polite term for a person who makes claims of ‘personal sorrow’ but has made no effort since to either pay employees or repay the banks, who were using deposits from millions like you and me to finance his life of excess
Even more frustrating is the role that our public sector banks have played in this debacle. Thanks to their political masters, these banks went on lending to Mallya, overlooking the end-use of funds even after it became clear the airline was not going to be revived, extending lifeline after lifeline even as Mallya continued to drag his feet in the courts. Most banks were shy of labelling him or his company as a wilful defaulter – a tag that could have shut down lines of credit before the debt ballooned – until they could no longer avoid doing so, and after the Reserve Bank of India started breathing down their necks to identify and tag bad loans. The country’s largest lender State Bank of India waited until November 2015 before it finally moved to take action.
Even now, as Mallya gets ready to leave for the UK, banks are remarkably silent on what to do with the man who racked up such debts and drove the airline into virtual bankruptcy. There has not been one statement, apart from declaring him a ‘wilful defaulter’, from banks on what they intend to do next. All they can do is seize some assets, but you can be sure that a canny businessman like Mallya will no longer have much of those in his own name, given the inordinate amount of time banks have taken to get to this point.
As for our political class, the less said, the better. As we have seen in the case of Subrata Roy, it has taken a dogged markets regulator and an unmoved Supreme Court to ensure that he received his just deserts. Perhaps it will take a similar effort to make sure Mallya repays what he owes his creditors and his former employees.
Prime Minister Narendra Modi came to power on the back of his slogan ‘Na khaoonga na khaane doonga’. While anecdotal evidence suggests this is happening to some degree in the power corridors of Delhi, the best test of his commitment perhaps will be how he directs government agencies to clean up Mallya’s mess.
