Vija Mallya, wanted for billions in unpaid loans, had resigned as a Parliamentarian this week. (File Photo)
Vijay Mallya, the businessman India termed a fugitive after defaulting on debt owed by his failed Kingfisher Airlines Ltd., said he is skeptical he will get a fair trial back home amid the "media frenzy and hysteria" over unpaid dues.
A day before an ethics panel was scheduled to review his membership in the upper house of parliament, he resigned from the legislative body known as Rajya Sabha, saying he no longer wished to have his name "further needlessly dragged in the mud." In a letter to the chairman of the house's Committee on Ethics, he said he was disappointed his fellow lawmakers have chosen to be swayed by the personal campaign against him.
"That I am facing trial by media and a lynch mob mentality is all too apparent," he wrote in the May 2 letter to Karan Singh, chairman of the panel. "I have no faith that in the current climate prevailing in the country that I will get any justice even at the hands of my colleagues." A copy of this letter and the one written to the chief of the house, announcing his resignation, were reviewed by Bloomberg News.
The ex-billionaire is fighting a case in India's top court after a group of lenders demanded full settlement of the carrier's dues, estimated at 90.9 billion rupees ($1.37 billion), including interest. Mallya has maintained he isn't a defaulter and offered a one-time payment proposal that was rejected by the banks. His passport was revoked last month after he left India to be closer to his children in England.
Sumanto Bhattacharya, a spokesman for Mallya and his UB Group, confirmed his resignation.
The ethics committee's Singh confirmed receipt of a letter from Mallya and told reporters in New Delhi that the panel will update parliament on Wednesday on its decision. He declined to say what decision was reached.
The ethics committee issued a "show cause" notice on April 25, giving Mallya a week to explain why he should continue as a member. He was elected to the Rajya Sabha in 2002 and again in 2010, both as an independent, with his current term set to end on June 30. In his letter, Mallya wrote there's no tenable basis for any possible adverse decision by the panel and that he isn't obstructing legislative functioning. He also questioned its legal authority, saying it doesn't have the power to consider his expulsion on any grounds.
The case involving Mallya has come to test India's resolve to go after many defaulters and recover unpaid debt amid pressure on the nation's lenders grappling with 8 trillion rupees of soured debt. The Reserve Bank of India ordered them to clean up their balance sheets by March 2017 by increasing provisioning and selling off stressed loans.
The tycoon's lawyer told the Supreme Court last week that Mallya, fearing arrest in India, may not return, setting the stage for a prolonged standoff with banks and the government.
Mallya previously offered 40 billion rupees by the end of September and a further 20 billion rupees if United Breweries Holdings, the parent of Kingfisher, wins a lawsuit alleging defective engines from International Aero Engines contributed to the carrier's collapse.
Lenders rejected the 60 billion-rupee settlement offer.
"Agree Kingfisher Air owes money to Banks," Mallya in comments on his Twitter Inc. account early Tuesday. "I am neither a borrower or a judgement debtor. Why am I a defaulter in spite of a settlement offer?"
The Enforcement Directorate, a specialized financial investigation agency focused on foreign exchange and anti-money laundering laws, obtained a non-bailable warrant against Mallya last month from a Mumbai court, where it alleged Kingfisher funds were transferred overseas to acquire property. In a statement, his UB Group termed the call for Mallya's arrest "erroneous and unjustified."
Mallya, 60, has maintained that Kingfisher was an "unfortunate commercial failure" because of macroeconomic factors and government policies. He has sparred with local media for portraying him as the poster boy for the nation's bad loans. The tycoon was ranked the 45th-richest Indian by Forbes in 2012, with a net worth of $1 billion.
"I believe this action on my part is in keeping with the highest standards of ethics that any member of Parliament should and ought to emulate," he wrote in his letter to Singh.
© 2016 Bloomberg L.P.
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