Among many other things, liquor baron Vijay Mallya seems to have mastered the art of misfortune. In yet another major blow to the businessman fighting R 9,000 crore loan default case with Indian banks and investigative agencies, the Supreme Court on Tuesday held Mallya guilty of contempt of court.
The development comes amidst the ongoing process to extradite Mallya from UK, to where he had fled in March 2016 to avoid arrest.
Vijay Mallya—the son of a millionaire, wannabe automobile racer, multibillionaire businessman, owner of several race horses, member of parliament and a party animal—could be described as Richard Branson, Bernie Ecclestone and Hugh Hefner—all rolled into one.
Born into a Goud Saraswat Brahmin family from Bantwal, Karnataka, Vijay Mallya was educated at La Martinière and at St Xavier’s College, Calcutta, where he graduated with a Bachelor of Commerce degree in 1976.
Mallya took over as 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 which increased by 64 per cent over 15 years to US$11 billion in 1998–1999. He consolidated the various companies under an umbrella group called the “UB Group”, and focused on the core business of alcoholic beverages. Over the years, he diversified the business and in the process acquired Berger Paints, Best and Crompton in 1988; Mangalore Chemicals and Fertilisers in 1990; The Asian Age newspaper in 2001.
Mallya also co-owns the Formula One team Sahara Force India. His companies own Indian Premier League team Royal Challengers Bangalore, the I-League teams Mohun Bagan AC and East Bengal FC. He is also a member of the World Motor Sport Council representing India in the Federation Internationale de l’Automobile. He also launched Kingfisher Airlines, an airline established as a major business venture in 2005. In May 2009, Kingfisher carried more than a million passengers, giving it the highest market share in India. Kingfisher also embarked on its long distance and first international flight to London. It kept adding more and more aircrafts to its fleet, not worrying about prices, fuel or maintenance.
However, one major business decision by Mallya was enough to pull him down from riches to rags. At a time when Captain Gopinath’s Air Deccan was running hammer and tongs towards debts and failures, Mallya acquired it in 2009. It was also the same period when the great recession shocked several countries and Indian economy was taking a bad hit already. Adding the math is pretty simple to figure out why Mallya’s Kingfisher began to run into debts around the same time. “It was a time when Mallya could not put a step wrong. The champagne was flowing and no one asked: who’s going to ride these planes?,” Rohit Bansal, a former aviation journalist and business consultant was quoted telling the Guardian.
Subsequently in 2010, Mallya, a member of Janta Dal, was nominated for the second term as Rajya Sabha MP. Oblivious to the forthcoming misfortune, the “King of Good Times”, flew higher and higher until his airlines venture became insolvent and was shut down in 2012, with huge unpaid loans to banks, months of salary arrears to employees and a slow aviation sector growth slimming chances of revival.
As things stand now, a group of 17 Indian banks are trying to collect approximately H9,000 crore (US$1.3 billion) in loans which Mallya has allegedly routed to gain 100 per cent or a partial stake in about 40 companies across the world. The 17 banks in a joint petition to the Supreme Court of India in March 2016 sought a direction to prevent Mallya from leaving the country, but failed. The Enforcement Directorate of India also filed a money laundering case against Mallya in March 2016 for allegedly sending abroad some US$130 million that had been loaned to his airline.