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Corporate Oct 12, 2012

Warrant against Vijay Mallya for bounced cheque

By Firstbiz Staff

A Hyderabad court today issued a non-bailable warrant against UB Group chairman Vijay Mallya for a bounced cheque worth Rs 10.3 crore.

Kingfisher Airlines had issued the cheque to the GMR International Airport in Hyderabad.

UB Group chairman Vijay Mallya. Reuters

As the news of the warrant that was first broke by Times Now spread, stocks of the beleaguered airlines and United Spirits immediately started a south movement.

The cheque was issued in January.

The warrant has dealt another blow to the Kingfisher chief who all the while has been looking for investors to save his airline, has now to look for a lawyer as well.

Banks, which declared Kingfisher as a non-performing asset in January this year, gave a succour to the carrier in the face of the employee strike by agreeing to release around Rs 60 crore last week from an escrow account.

The banks have, however, flatly refused the airline's request for fresh loans and asked it to come up with a revival plan by end of October and the future strategies will depend on that, Vishwanathan said today.

Last week, the aviation regulator DGCA had slapped a show-cause notice to the otherwise flamboyant liquor baron Vijay Mallya-promoted airline threatening to revoke its flying licence due to continuing strike by its employees.

Mallya, who is also the promoter chairman of the liquor giants United Spirits and Unit Breweries, is desperately trying to raise funds to save Kingfisher Airlines. Kingfisher, which was till last year the No 2 airline, is down to the last slot in market share and has not posted profits since its launch in May 2005.

by Firstbiz Staff

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