The Fall of the King of Good Times

Vijay Mallya the ex-chairman of United Spirits, which was the largest spirits company in India, continues to serve as chairman of United Breweries Group, an Indian conglomerate with interests including beverage alcohol, aviation infrastructure, real estate and fertilizers. He has served as the chairman of Sanofi India (previously known as Hoechst AG and Aventis) and the chairman of Bayer Crop Science in India for over 20 years, along with serving as the chairman of several other companies.

He is the son of businessman Vittal Mallya, and became the chairman of United Breweries Group in 1983 at the age of 28, following his father’s death. Since then, the group has grown into a multi-national conglomerate of over 60 companies, with an annual turnover that increased by 64% over 15 years. US$11 billion in 1998–1999. Over the years, he has diversified and acquired Berger Paints, Best and Crompton in 1988; Mangalore Chemicals and Fertilisers in 1990; The Asian Age newspaper and the publisher of film magazines, and Cine Blitz, a Bollywood magazine in 2001.

United's Kingfisher beer has a more than 50% market share in India. It is available in 52 other countries, and leads among Indian beers in the international market.

Kingfisher Airlines, established in 2005, was a major business venture which was launched by Vijay Mallya. After a few years of operating, it was considered to be one of the most customer friendly airlines in the world. However, this venture eventually became insolvent and ceased its operations. As of October 2013, it had not paid its employees their salaries for approximately 15 months, it lost its licence to operate as an airline, and owed more than US$1 billion in bank loans. By November 2015, the amount owed to the banks had grown to at least $1.35 billion, and there were other debts owed for taxes and to numerous small creditors. As a part of the Kingfisher collapse, Vijay Mallya was accused of being a "Willful Defaulter" under Indian law. A wilful defaulter is an entity (legal/natural) who has not repaid the loan amount despite its financial ability to repay it. Apart from this, he was also held accountable and accused in and of money laundering, misappropriation, etc.

In March of 2016, a consortium of banks approached the Supreme Court of India to stop Mallya from going abroad due to the debts his company was undergoing and the loans which were owed to that consortium.

However, as per the media reports, he had left India before the cluster of banks could go through with their complaint. On 13th March 2016, a court in Hyderabad issued a non-bailable warrant for Mallya's arrest in a loan default case. On 18 April 2016, a special court in Mumbai also issued an undated non-bailable arrest warrant against the businessman. This was issued in response to a plea by the Enforcement Directorate on 15 April before the special court hearing cases under the Prevention of Money Laundering Act, 2002. There were allegations on him that he transferred ₹4,000 Crore (US$560 million) to tax havens.

The Rise

Vijay Mallya was one of the primary flag bearers of the idea of Liberalization. Having inherited a readymade drinks empire in 1983, he explicitly realized that he was going to face competition from foreign players, who sooner or later would show up on the country’s shores. Following the dictum- ‘join them if you cannot beat them’, Mallya started forming alliances with foreign liquor majors to strengthen his empire while also diversifying his own. Over the next decade and a half, he went a step further, becoming owner of production facilities and companies abroad, because of being a non-resident Indian, the status helped him run both his international and domestic businesses with ease, which he realized in the late 1980s after his failed attempt at buying the blue-chip Shaw Wallace. Vijay Mallya’s business acquired a global facet. At the same time, he was accumulating all kinds of personal assets, such as luxury houses and vintage cars, quickly gaining the reputation of being an open-fisted spendthrift. The liquor king’s opulent lifestyle in the fast lane was much talked about.

Liberalization was the primary reason businessmen started joining politics. The businessmen had excessive money to spare, therefore, as a matter of fact they realised that there is more profit in getting elected as public representatives instead of giving money to politicians and wait for them to get elected.

This intrigued Mallya as well, as soon he also joined politics, powering his way to the Rajya Sabha.

Ascendancy soon dominated Mallya’s mind. This led him to establish the Kingfisher Airline.

The Decline

It was the establishment of Kingfisher Airlines that Vijay Mallya’s empire started to decline.

However he was late in realizing this. Mallya, wanted to expand his business to fly overseas. So he acquired the older, low-cost Deccan Aviation (which ran Air Deccan flights) and merged it with Kingfisher for a better experience record, a prerequisite for a licence to fly abroad.

His problems swiftly began to exacerbate in 2008 as a result of the global downturn and the inflation the aviation fuel prices.

After this Vijay Mallya used his manipulative skills to persuade a consortium of banks to lend him a huge sum of money and restructure his earlier loans. The downslide that had begun could not be stemmed, and became worse. In 2012, the airline started sinking, leaving behind unpaid staff and creditors. Mallya, always surrounded by his admirers, probably did not see the end coming and looked for more money to somehow flog to life his grounded airline. His close ones argued that the government of the day strived to promote rival airline Indigo and support the “then sinking” state-owned Airline- Air India. Alack, no luck paved his way.

Although he suffered humongous losses yet the “King of Good Times” led an extravagant life.

The major downfall was caused when allegations were put forward by the Central Bureau of Investigation (CBI) and thereafter the Enforcement Directorate (ED) figured out that Mallya began diverting cash from his own company from 2010, stashing away a part of it overseas. This was to fund his lifestyle abroad and to take a position in by investing in activities like F1 racing. The impression is that he was doing this whilst his companies were getting to seed and bank loans remained unpaid. In the end, the banks—which took a rather soft approach towards him to start with—had to declare him a “wilful defaulter”. He was now officially someone who had the time to repay his loans but wasn't doing so. He was said to have burned away crores of rupees on his sixtieth birthday celebrations in December 2015,

As of recent updates, enforcement agencies are listing his assets abroad.

On seeking the knowledge of his imminent arrest, Mallya fled India and is now living within the UK. He has evaded many summons from investigating agencies. His Indian passport has been revoked. He has been declared a proclaimed offender by Indian courts and now extradition proceedings are initiated against him within the United Kingdom.

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