Banks to Declare KFA as Wilful Defaulter
By ENS Economic Bureau | Published: 25th July 2014 10:20 AM |
BANGALORE: A day after members of Parliament raised the issue of taking action against willful loan defaulters like liquor baron Vijay Mallya, banks are reportedly initiating process to declare the Chairman of grounded carrier Kingfisher Airlines a ‘willful defaulter’.
KfA was grounded in October 2012 and has accumulated debts over `7,000 crore with various secured and unsecured creditors. Financial Services Secretary, GS Sandhu was quoted by agencies as saying, “some banks have already started the process.”
Secured and unsecured creditors, I- Tax authorities, AAI and even employees of the grounded carrier have initiated legal proceedings against KfA and Mallya for unserviced debts and unpaid wages in various courts in the country. Senior JD(U) leader KC Tyagi had said (in Rajya Sabha) that industrial houses had defaulted on ` 53,000 crore and 406 ‘rich’ people have not paid `70,000 crore worth of loans.
“This (declaring wilful defaulter) would be done by banks and it would be their individual decision,” Sandhu was quoted as saying. Once a person is declared wilful defaulter, then criminal proceedings can be initiated against the firm. They would also not be able to raise fresh funds or start up new firms for five years, it was reported.