On Wednesday, IDBI Trusteeship invoked and transferred pledged equity shares worth 7.31 per cent in Kingfisher Airlines to the depository account of lenders. As a result, UB Group chief Mallya’s holding in the now defunct airline has fallen to 8.55 per cent from 15.86 per cent in March.
At the beginning of this year, his stake in the airline stood at 30.14 per cent.
Following IDBI Trusteeship’s move on Wednesday, lenders to the airline have invoked all its pledged shares. About a week ago, Kolkata-based United Bank of India (UBI) had issued a wilful defaulter’s notice on Mallya, after the consortium of lenders to the airline failed to make headway in recovering dues.
UBI has exposure of Rs 400 crore to Kingfisher Airlines, which it has classified as a non-performing asset.
According to Reserve Bank of India guidelines, banks can categorise defaulters as wilful if the borrower doesn’t repay when it has the capacity to honour the obligation, or the funds are diverted and not used for the purpose it was taken for, among others. “If a borrower is so tagged (as a wilful defaulter), it will find it difficult to obtain a loan from any bank. The borrower become ‘untouchable’ for lenders,” said a senior official of a public sector bank.
Read news in full 12/06/14 Raghuvir Badrinath/Business Standard
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