Vijay Mallya owes massive unpaid loans of the long-defunct Kingfisher Airlines to banks.
Highlights
- Vijay Mallya cannot access Rs 515 crore severance pay from Diageo
- Decision after lender SBI moved Debt Recovery Tribunal against Mallya
- Mallya's Kingfisher Airlines owes Rs 7000 crore in debt to its lenders
A tribunal today temporarily halted a $75 (Rs 515 crore) million settlement to be paid by spirits giant Diageo to liquor baron Vijay Mallya, after he resigned as chairman of Diageo unit United Spirits.
The court - the Debt Recovery Tribunal (DRT) - ruled in favour of a group of creditor banks, owed money by Mr Mallya's now-defunct Kingfisher Airlines, and who had argued they had the "first right" to the Rs 515 crore exit payment from Diageo.
Kingfisher, which stopped flying more than three years ago, had $1.4 billion or Rs 9,400 crore in debts as of September 2013, according to corporate filings from the time.
Mr Mallya said in a statement on Sunday that he is in talks with a group of 17 banks for a one-time settlement of Kingfisher's debt, adding that he has no plans to run away from his creditors.
His considerable troubles are expanding quickly - a money-laundering case was filed against him today by the Enforcement Directorate for allegedly sending abroad Rs 900 crore that he borrowed from a bank.
The tribunal's decision is based on a petition by the State Bank of India or SBI, which is owed Rs 1,600 crore by Kingfisher. SBI has also asked the Karnataka High Court to arrest Mr Mallya, 60, and to suspend his passport.
In 2012, Mr Mallya sold United Spirits to Britain's Diageo; after months of acrimony, he agreed last month to give up his chairmanship and board position at India's top spirits company.