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Vijay Mallya Scam
Table of Contents
- Who is Vijay Mallya?
- The beginning of Kingfisher Airline!
- Air Deccan: A corporate takeover by Vijay Mallya
- The Beginning of Vijay Mallya Fraud!
- Suspicious Attempts of Banks - Vijay Mallya Case
- The Kingfisher Airline is landed.
- What exactly has become faulty?
- Vijay Mallya scam: The Government action against Vijay Mallya
- What is the standpoint of Vijay Mallya?
- The Final Word on the Vijay Mallya Scam
Vijay Mallya Scam is one of India's economy-hampered corporate scams. A 9,000 crores Vijay Mallya scam amount made the Indian economy a drastic downfall. With the rise of industrialization and capitalism in the past few years, the Indian people's worldview has always encouraged them to avoid hazardous programs and pursue secure work opportunities.
This was one of the primary reasons why so many Indians thought entrepreneurship was not their thing. However, because the crowd only wants a couple of entrepreneurial cases to be impacted and alter their minds by providing challenging business opportunities, the Vijay Mallya case was more than enough to convince them that operating an enterprise isn't that awful. In addition, Vijay Mallya'sinteresting lifestyle served as an attraction, drawing others into the entrepreneurial world.
Before moving ahead with pre-published stats and insights about the Vijay Mallyascam case, let's have a quick go-through about Vijay Mallya. When it comes to enjoying life, Vijay VittalMallya is one of the world's most notable figures. EX- the owner of the IPL cricket team of Royal Challengers Bangalore, former chairman of United Spirits, head of United Breweries Group, owner of Kingfisher Airlines, erstwhile owner of Force India's Formula One team, as well as ex Member of RajyaSabha, who was famed for his posh lifestyle and was dubbed the 'King of Good Times,' has now joined the ranks of individuals who ended up losing everything from wealth to scraps.
The beginning of Kingfisher Airline!
- Notwithstanding his accomplishments, Vijay Mallya is famed for the downfall of Kingfisher and the subsequent scandal. The event involving Kingfisher Airlines is well-known. It was the core of Vijay Mallya'splan to build India's first five-star world-class flight.
- Kingfisher Airlines quickly became a prestige brand airline since its establishment in 2005. In 2006, it was all thanks to freshly furnished planes, attractive airline staff, delicious cuisine, and, most importantly, in-flight enjoyment.
- In addition, Kingfisher provided complimentary alcohol consumption in the accommodations to first-class customers, despite domestic planes in India being prohibited from serving alcohol at the time. These factors established Kingfisher as the preferred airline for leisure travelers and other privileged travelers.
Air Deccan: A corporate takeover by Vijay Mallya
- Vijay Mallya was dissatisfied with the service provided by Kingfisher Airlines within Indian boundaries. So he plans to take the company internationally. However, under Indian regulations, airlines that have been in business for less than five years are not permitted to operate foreign lines. So Vijay Mallyachose to get around the rules by buying a preexisting airline.
- Initial bidding auction for Air Sahara in 2006, but Jet Airways won. He was eventually fortunate enough to take over Air Deccan. In 2008, Kingfisher was granted authorization to fly on overseas lines, with its maiden jet connecting Bangalore with London.
- By 2008, Kingfisher Airlines had 77 aircraft and was flying 412 domestic flights every day, carrying a total of 10.9 million travelers. Kingfisher Airlines then became the top market-leading player in India in 2009, with 22.9 percent.
The Beginning of Vijay Mallya Fraud!
Vijay Mallya continued to borrow funds via banks to operate his aircraft company. Vijay Mallya obtained 9000 crores in debts from 17 banks, and despite SBI reporting him penniless, several banks proceeded to grant him credit. His firm also collected traveler transport tax, PF, and staff income tax. He did not report these figures to the PF or IT officials. The company was forced into bankruptcy after failing to pay wages to its employees. Kingfisher had to cease its services in 2012 due to a lack of funding to continue services. In addition, Vijay Mallya stopped repaying his debts.
Suspicious Attempts of Banks - Vijay Mallya Case
Bank's or senior personnel's methods and security procedures to give Mallya all these funds have also sparked debate. Vijay Mallyahad taken out a loan from the Bank of India centered on the security of desk supplies, airline ticket machines, and portable seats. Bank authorities were suspicious of the banks' willingness to make debt dependent on existing resources like equity. SBI provided credit based on Kingfisher Airlines' patents and assets. These were retained as security. In 2009, all patents were valued at approximately Rs. However, they are currently worth less than Rs 4000 crores.
The Kingfisher Airline is landed.
Given its enormous popularity, Kingfisher has consistently lost money since its inception. Because it failed to generate profit every single time. After 2010, the aircraft business struggled to acknowledge customers, which was an ample warning that its competitors continued to do so. For the initial period in 2011, the company publicly stated that it was experiencing liquidity problems.
Kingfisher Airlines was deemed a non-performing asset by SBI in 2012, making it a bad year for the company. It had even ceased paying its personnel, causing its pilots to seek more lucrative opportunities.
Ultimately, Kingfisher Airlines was suspended in 2012, accompanied by the termination of its permit in December of that year. At this point, the Kingfisher corporation had reached the end of its tenure.
What exactly has become faulty?
-Business Model Flaws
The lack of vision is the first factor behind Kingfisher Airlines' downfall. The group began with an inexpensive trip that eventually upgraded to a premium-level operation. Following that, they became poor carriers. Travelers grow bored on this flight as the business's intended clientele fluctuates. They do not emphasize lucrative lines is another flaw in their company approach.
Vijay Mallya'sinvolvement in his aviation industry was another disaster for Kingfisher Airlines. There is no permanent CEO or MD at Kingfisher. Governance is a highly critical aspect of every organization's growth.
-Downturn of 2008
The bankruptcy of Kingfisher Airlines is caused by a combination of personal and business-related causes. Another cause of Kingfisher Airlines' default was the 2008 economic downturn, which contributed to the company's downfall.
As previously mentioned, Kingfisher Airlines purchased Air Deccan, a limited carrier. Accordingly, Vijay Mallya classified these businesses as distinct entities in the Petitioning.
-Excessive service expense
Another indirect trigger for Kingfisher Airlines' bankruptcy seems to be that the aviation sector has increased operating expenses compared to rival companies. As a result, flying firms need permits for another step: a partnership with Air Deccan, which has low-cost lines, expenditures on plane maintenance, and wages.
Vijay Mallya scam: The Government action against Vijay Mallya
- Vijay Mallya is charged with fraud and money laundering in Rs. 9,000 crore.
- Vijay Mallya reportedly fled to the United Kingdom on March 2, 2016, after learning he was a wanted robber and was due to be jailed.
- Vijay Mallya obtained a summons from the government for offenses included in the Money Laundering Prevention Act of 2002. As a result, foreign officers arrested Vijay Mallya on a global warrant. India urged that he be sanctioned for theft and money laundering, which began in December 2017. However, after considering extensive objections from Vijay Mallya's lawyers and the ED attorneys, special judge MS Azmi declared Mallya an FEO under Section 12 of the Act.
- The ruling came as five claimants and a Vijay Malya's family member requested court records from ED. These records were needed to have Vijay Mallya designated as a fugitive economic offender under the proposed law.
What is the standpoint of Vijay Mallya?
According to Vijay Mallya'sassertions, the bankruptcy of Kingfisher Airlines was caused by demographic factors and government policy at the time. In terms of his image being brought up in all NPA proceedings, he claims he is the victim of a publicity effort. Fewer people are aware that Vijay Mallya has offered banks Rs. Four thousand crores in exchange for the resolution of all his affairs. However, according to news sources, creditors have approved repayments of Rs.4900 crores.
The Final Word on the Vijay Mallya Scam
People used to feel sorry for Mallya because they believed his bankruptcy was due to his current financial circumstances and rotten timing. However, a closer examination of the situation reveals that this corporate titan engaged in disproportionate money laundering. Years have passed, and the Indian government is still attempting to arrest Mallya as he remains free. The postponement would only result in unfairness and additional humiliation; as a result, stern steps must be taken to make perpetrators rethink twice about perpetrating similar offences in the future.