Mallya to pursue legal action against 'wilful defaulter' tag

Tags: Companies
Declared a wilful defaulter by state-owned United Bank of India, UB group Chairman Vijay Mallya today disagreed with the action of the lender and said he would pursue legal action.

"We were not given a hearing, we have not appeared before them, we disagree with their action and we shall pursue legal action," Mallya told reporters after the annual general meeting of United Breweries here.

Reiterating his intention to seek legal recourse, Mallya said: "I have great faith in the judicial system of our country and as I have said, I will pursue the legal remedies that are available to me."

On Monday United Bank of India declared Mallya and three directors of debt-ridden Kingfisher Airlines, wilful defaulters as the company allegedly indulged in diversion of funds by opening multiple accounts.

Kingfisher Airlines and directors declared as wilful defaulters will not be able to borrow from banks in the future. They would also lose Director-level positions in companies and criminal proceeding could be initiated against them, if warranted, to recover the money.

The carrier had allegedly opened multiple current accounts leading to diversion of funds, said a bank official, adding that there is a balance of Rs 7.5 crore in other-than-the-designated current account as on date.

The Kolkata-based bank is the first PSU lender to initiate the process of declaring Vijay Mallya and three other directors of the grounded Kingfisher Airlines as wilful defaulters a couple of months ago.

Other banks such as State Bank of India, IDBI Bank and Punjab National Bank have also initiated the process of declaring KFA and its directors as wilful defaulters.

UBI's exposure to Kingfisher Airlines was around Rs 350 crore as part of consortium led by State Bank of India.

The consortium of 17 banks, has an outstanding debt of about Rs 6,521 crore from the now-grounded carrier and outside the consortium, the bank gave about Rs 60 crore loan for Pre-Delivery payment.

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