Mumbai: Lenders to grounded Kingfisher Airline Ltd may be routinely
using the phrase ‘wilful defaulter’ while discussing its chairman, the
beleaguered business baron Vijay Mallya, also the chairman of the UB
group, but it may be difficult for them to actually declare him a
defaulter legally as there is no indication of fraud by Kingfisher
Airlines, senior bankers told Cogencis.
“The Kingfisher Airlines case is a clear case of a venture that was an adventure, which banks also joined in. There is no case of fraud as the key issue was more of a mismatch between revenues projected and earned,” a chairman and managing director of a large Mumbai-based bank said.
As per the Reserve Bank of India norms, a wilful default happens when a company does not repay obligations despite having resources, or has not utilised the loan for other purposes or when there has been siphoning of funds or when the collateral has been sold without the lender’s consent.
Read news in full 24/06/14 Free Press Journal
“The Kingfisher Airlines case is a clear case of a venture that was an adventure, which banks also joined in. There is no case of fraud as the key issue was more of a mismatch between revenues projected and earned,” a chairman and managing director of a large Mumbai-based bank said.
As per the Reserve Bank of India norms, a wilful default happens when a company does not repay obligations despite having resources, or has not utilised the loan for other purposes or when there has been siphoning of funds or when the collateral has been sold without the lender’s consent.
Read news in full 24/06/14 Free Press Journal
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