Banks all set to dismiss Mallya’s partial settlement proposal

A consortium of banks, led by State Bank of India, is likely to reject liquor baron Vijay Mallya’s proposal for partial settlement. Earlier in last week, Mallya had submitted a proposal in the Supreme Court to pay Rs. 4000 crore as partial settlement of the dues he owes to the banks. Lenders had a detailed discussion on Saturday over his proposal. 

Sources in Consortium said that they had a detailed discussion on Saturday over Mallya’s recent proposal. “The Rs 4,000-crore offer presented in the Apex Court last week isn’t good enough. Mallya needs to double the settlement offer,” said the official. He further added  that the message was not conveyed to Mallya and his Counsels yet. “However, it has already been decided that the bankers will be rejecting this offer on Thursday during the Supreme Court hearing on the matter,” he said. Industrialist Mallya on April 30 offered to pay as much as Rs 6,000 crore to settle over Rs 9,000 crore in dues for his defunct Kingfisher Airlines Ltd owes to banks. Mallya promised to pay Rs 4,000 crore upfront by September end and an additional Rs 2,000 crore if he wins a lawsuit filed against a plane engine maker, CS Vaidyanathan, the lawyer representing Mallya, told the Supreme Court. 

The consortium of 13 banks had moved the Supreme Court early this month to impound Mallya’s passport to restrain him from leaving the country. However on March 9, the first day of hearing, Attorney-General Mukul Rohatgi appeared for the banks only to inform the Bench that Mallya had already left the country. Rohatgi said the businessman had left the very day the banks moved the Debt Recovery Tribunal (DRT) to recover the money.