New Delhi: Two internal notes by the IDBI Bank, which lent Rs 900 crore to beleaguered liquor baron Vijay Mallya in March 2009, indicate a marked difference in the bank’s stance on the grant of loan.
While one note flags the financial woes of the company citing its negative credit rating, the second exudes confidence in the Kingfisher brand and favours the grant of loan to Mallya’s now defunct company. The bone of contention here is that the year that IBDI granted Mallya the loan (March 2009), Kingfisher Airlines had posted losses to the tune of Rs 1,600 crore.
A fact difficult to be missed here is the unmatched efficiency that the bank showed in extending these loans. It took Mallya all but 20 days to secure such a heavy loan from the bank.
Contradicting the stand taken by the bank in the first note that highlighted Mallya’s financial woes, the bank dismissed the concerns raised and decided to go ahead with the loan. The reasons cited in the second note to appear to contradict ground realities – Mallya’s airline was at the height of its financial duress.
The second note sounds upbeat about the Kingfisher Airline's prospects, highlights the brand value of Kingfisher beer and claimed that the brand had been pledged as collateral. This move also allowed Mallya to borrow at a lower rate of interest than an unsecured loan.
This second note also expressed confidence in the corporate guarantee offered by the liquor company that Mallya owned, whose stake in companies like United Breweries was worth several hundred crores.
Mallya has now been dubbed a willful defaulter and an absconder, charges that he sought to defend vociferously during the initial days after his dramatic escape to London, leaving the courts and authorities in a fix.
The Enforcement Directorate, which is probing whether Mallya illegally routed a chunk of the Rs 900 crore loan to a foreign country, is now suspecting a political push behind this dole.
ED sleuths questioning IDBI's ex-chief Yogesh Agarwal said that they "have reasons to believe there was political intervention for Mallya", The Economic Times reported today.
Mallya has been asked to appear before ED on April 2, and the directorate will question the businessman on "political favours he received", the report quoted an official.
The same ED official said that among other lines of inquiry, the directorate will examine IDBI's Mallya loan files closely to see whether any bank official involved made margin notes referring to political intervention.
