Govt to go hammer and tongs against defaulters

Minister of State for Finance Jayant Sinha said wilful defaulters and the corporates that are unable to repay loans with their business being hit due to global slowdown should not be viewed in the same manner. “We have some people that are wilful defaulters,that have genuinely engaged in illegal activity. As far as those are concerned, the full force of the law is being applied. All the investigative agencies are working in that regard to ensure that they have to be brought to justice,” said the minister.

He, however, did not make any direct reference to Mallya who had left India on March 2, presumably for London, days before the Supreme Court heard a plea of clutch of state-owned banks seeking recovery of over Rs 9,000 crore from his group companies. Sinha said the second set of defaulters, are those corporates who because of some slowdown in global economy or because of policy failure of the previous government are facing significant financial distress. “And we have to have appropriate resolution process as well as appropriate policy intervention to ensure those that are NPAs for those kind of reasons go through orderly resolution process,” he said.

Sinha said there wasn’t anything “illegal or criminal” done by those classic business failures that happened because of wrong business/financial strategies or external factors that made projects or business unviable. “We have to ensure that people who are facing business challenges do not have to go through those kind of problems again. So we have to deal with structural issues which is where bankruptcy code becomes important so that we avoid these problems in future,” he said.

Meanwhile Mallya, who owes thousands of crores to banks in loans, tweeted to say that he is being “hunted down by media in UK” but he will not speak. “I am being hunted down by media in UK. Sadly they did not look in the obvious place. I will not speak to media so don’t waste your efforts,” Mallya tweeted on Sunday morning. On the same day a non-bailable warrant was issued against businessman Mallya after he failed to appear in a Hyderabad court, in connection with alleged dishonour of a cheque of Rs 50 lakh to GMR Hyderabad International Airport Ltd. The counsel for Mallya, said he will move the high court seeking quashing of the non-bailable warrant (NBW).

Also on Sunday, the Labour Ministry said it will soon launch an investigation to check whether there were any anomalies in the provident fund contributions made by Kingfisher Airlines for its employees when the carrier was functioning. Union Minister of State for Labour Bandaru Dattatreya said. “We have not examined the issue so far. I will look into that. We will examine (all the issues).”