Vijay Mallya and his UB Group’s holding company have failed to get commissions
Industrialist Vijay Mallya and his UB Group’s holding company have failed to get commissions worth about Rs. 225 crore for providing guarantees to the lenders of Kingfisher Airlines, as its lenders asked the carrier not to make any such payments.
These commissions pertain to the aggregate payments for a period from January 1, 2011 to March 31, 2013, and include an amount of little over Rs. 100 crore for the last fiscal 2012-13, the grounded airline has said.
The disclosure has been made by the grounded airline itself as part of the ‘notes to the accounts’ of the company’s fourth quarter financial results for the period ended March 31, 2013.
“The consortium of bankers pursuant to the RBI’s guidelines directed the company (Kingfisher) not to make payment of commission and reverse all entries relating to commission to the guarantors for issuing guarantees at the request of the company to its bankers with effect from January 1, 2011,” Kingfisher said.
“The company communicated the matter to the concerned guarantors, United Breweries Holdings Ltd (UBHL) and Vijay Mallya, respectively, who have together with Kingfisher Finvest India Ltd filed a suit in the Bombay High Court against the consortium of bankers…” it added.
The relief sought by the company from the courts includes declaring as void the corporate guarantees given by UBHL and the personal guarantee of Mallya. Besides, they have also claimed damages worth about Rs. 3,200 crore.
“The suit is pending in the Bombay High Court. In view of the aforesaid facts, no provision for the period from January 1, 2011 to March 31, 2013 to the extent indicated earlier has been made in the books of account of the company for commission in respect of the guarantees, which are sought to be declared void ab-initio and non-est in the suit.
“Commission for the period from January 1, 2011 to March 31, 2013 would have aggregated to Rs. 22,4.83 crore,” Kingfisher has said, while pegging the commission for the quarter ended March 31, 2013 at Rs. 24.8 crore and for the year ended March 31, 2013 at Rs. 1,000.7 crore.
Earlier in the financial year 2010-11, Kingfisher had paid its chairman and key promoter, Vijay Mallya, little over Rs. 50 crore as commission for providing guarantees worth more than Rs. 6,100 crore for the airline’s loans and other liabilities during the fiscal.[source:NDTV]