Public sector lender United Bank of India has declared Kingfisher Airlines and its promoter Vijay Mallya as ‘wilful defaulter’, Press Trust of India reported.
Kingfisher Airlines, grounded since October 2012, had taken a loan worth of Rs. 350 crore from the bank.
Once a company is declared wilful defaulter, criminal proceedings could be initiated against promoters and directors of the company. Besides, they would not be allowed to raise fresh funds from banks and set up new ventures for five years.
As per RBI guidelines, for declaring ‘wilful defaulter’ it would have to be proven that the borrower had diverted funds which he/she took from the bank and was not paying up despite having the ability to pay.
Kolkata-based United Bank of India was the first PSU lender to initiate the process of declaring Vijay Mallya and three other directors on the grounded Kingfisher Airlines as wilful defaulter.
A State Bank of India-led consortium of 17 lenders has an outstanding debt of about Rs. 4,022 crore from the now-grounded airline. The consortium has also initiated the process of recovery of its dues. (With Agency Inputs)
