Kingfisher Villa owned by Vijay Mallya in the name of, United Breweries Holdings Ltd. (UBHL), as the villa was mortgaged against the loans as collateral. Banks have decided that the auction will take place in goa on 19th October and serving price was decided to be of 85 crore. As the date has been kept for so close the auction notice is hence, expected soon to be released.
The villa which is located in Goa was mortgaged against the loan given to Kingfisher Airlines, the airline which has not flown any flight since October 2012. Kingfisher Airlines owes almost Rs 7,000 crore to a total of 17 banking institutes who have filed several suits against the airline and has been trying to recover money since the airline stopped flying. The banks are recovering some part of their money by auctioning securities that has been pledged to them by Vijay Mallya, but the rest is yet to be recovered.
Except for real estate the airline had some shares in different multiple group entities as well as certain other companies which is also to be auctioned. Vijay Mallya took this amount from different banks under the name of Kingfisher airlines and the business was never seen blooming as expected.
Earlier this year two of his properties which accounted for Kingfisher House and Corporate office of the airline in Mumbai went up for e-auction but no buyers approached SBI relating to the offer. The reserve price for both the properties during that auction was Rs 150 crore and Rs 135 crore respectively. This reflected clearly the problem banks face in India hen they try to recover money from defaulters.
Banks from private sector doesn’t rely on India law for recoveries as the process is way longer and the promoter even shield themselves behind the veil of delaying tactics to further slow down getting served justice. Even the stats of debt recovery tribunals from last year and this year shows a huge difference of more than 50 thousand crore, between cases lying pending in mid-2015 and mid-2016. This is it for now, stay tuned for more news and interesting articles.