Vijay Mallya is one of India’s most flamboyant business figures, known as a liquor baron, an airline owner, and a man who reportedly owns 250 vintage cars.
But Mallya, 60, is now known as a debtor who is being pursued by banks to recover the mountain of debt he has accrued. He left the country on March 2, just as some 17 banks were closing in on him for payment of delinquent loans totaling the equivalent of nearly $1.5 billion.
He now faces criminal investigations and the possibility of an international warrant for his arrest.
In 2005, surrounded by a galaxy of Indian film and political stars, Mallya launched Kingfisher Airlines. Polishing his playboy image, he handpicked the attractive cabin crew and promised passengers they were in for a first-class ride.
The shareholders were taken for a ride of different sort. Kingfisher’s fleet has been grounded for more than three years and a share today is worth less than two cents. Employees and tax authorities say they are owed money, according to columnist Shekhar Gupta.
“India’s labor laws are very strong,” Gupta says. “In his case, not only has he not paid employees, but even the statutory dues – for example, the tax his company deducted on employees’ salaries – income tax — has not been paid.” Nor has he paid into their pension savings funds, according to Gupta.
Kingfisher Airline reportedly owes state banks a total of 70 billion rupees, or just over $1 billion. While the banks attempt to auction off Kingfisher House, the one-time headquarters of the airline, investigators want to know if Mallya used airline funds to finance his lifestyle.
Mallya has real estate holdings said to include a game lodge in South Africa, a castle in Scotland and a condo at the Trump Plaza in New York. His flamboyance and his fabled parties set him apart, but also meant he hasn’t received much sympathy, says educator and commentator Sashi Kumar.
“It’s good to have money, good to have a good life. But being seen as someone who’s always with women, and flaunting money, the in-your-face-kind-of-character, that runs against the grain of the Indian ethic of someone who is successful,” Kumar says.
Mallya’s defunct airline bore the same name as India’s best-selling beer, Kingfisher, the brand Mallya inherited from his late father.
Author K. Giriprakash chronicled the life of the colorful son in a book titled, The Vijay Mallya Story.
“His father was very meticulous, was very careful with money, especially shareholder’s money, and he stuck to the business which he knew. As far as his son is concerned, he is everything opposite to what his father stood for,” says Giriprakash.
Gupta says an ambition to be “Richard Branson and Donald Trump rolled into one” drove Mallya’s splashy ascent.
But he started an airline when the global aviation business was in the doldrums. The high cost of jet fuel at the time didn’t help.
Biographer Giriprakash says Mallya’s descent began when he acquired stakes in a host of other businesses, including engineering, construction, and Formula 1 racing.
Taking On Huge Debts
To finance his operations, Mallya amassed huge debts while he was also a member of the Upper House of the Indian Parliament. Senior journalist Shekhar Gupta blames what he calls India’s “easy embrace of cronyism,” and says lending money to Mallya was the bankers “ticket to corridors of power.”
“If you are his lender, you’re invited to sit in his box at a cricket match, which is a big event in India,” Gupta says. “You get invited on his yacht, on the plane. He collected, money, glamour, hormones, alcohol all in the same place. He is the finest and loudest brand ambassador for crony capitalism in India. But behind this he also had a real business – a liquor business.”
Mallya remains chairman of United Breweries, India’s largest brewer. However, Heineken is a shareholder and looks to be moving in on the indebted spirits baron, and could ask him to step aside.
His legal troubles accumulating, Mallya left for London just days before the banks were expected to ask for an order restraining him from leaving India.
On Twitter, Mallya says he’s not absconding, but he has asked for more time to appear before Indian authorities.