Vijay Mallya-Riches to Rags

Introduction
Vijay Mallya
Vijay Mallya in 2008

Member of Parliament (Rajya Sabha)

In office
1 July 2010 - 2 May 2016
In office
10 April 2002 - 9 April 2008
Constituency Karnataka
Personal details
Born
18 December 1955 (age 60) Kolkata, West Bengal
Nationality Indian
Political party Independent
Spouse(s) Sameera Tyabjee (divorced)
Rekha
Children Siddharth Mallya
Parents Vittal Mallya (Father)
Lalitha Ramaiah (Mother)
Occupation Businessman
Religion Hinduism
Signature ... —-
 Vijay Mallya Profile
Known for his flamboyant lifestyle and chilled out attitude, Vijay
Mallya was the owner and chairman of the UB Group (United
Breweries Group).
Launched a new domestic airline called Kingfisher Airline
Vijay Mallya is the son of a famous industrialist Vittal Mallya.
In 2005, Vijay Mallya established Kingfisher Airlines.
In a short span of time Kingfisher Airline has carved a niche for
itself.
It was the first airline in India to operate with all new aircrafts.
Kingfisher Airlines is also the first Indian airline to order the
Airbus A380.
Vijay Mallya has other interests too apart from business. He has won
trophies in professional car racing circuits and is a keen yachtsman and
aviator.

Vijay Mallya has also won numerous trophies in horse racing including
several prestigious Derbies. In 2000, Vijay Mallya entered politics
superseded Subramaniam Swami as the president of Janata Party.
Till 2 May 2016 he was M.P. in Rajya Sabha
 Business
Mallya became the Chairman of United Breweries Group in
1983 at the age of 28, following his father's death
He consolidated the various companies under an umbrella
group called the "UB Group", spun off non-core and loss
making businesses and focused on the core business of
alcoholic beverages.

G R O U P KINGFISHER
tltllNCS
United's Kingfisher beer has more
than a 50% market share in India's
beer market. The beer is available in
52 countries outside India and leads
among Indian beers in the
international market
United Spirits Ltd, the flagship UNITED SPIRITS
company of the UB Group, achieved A DIAGEO Group Company
the historic milestone of selling 10
crore (100 million) cases, becoming
the second-largest spirits company in
the world by volume under Vijay
Mallya's chairmanship
Kingfisher Airlines, established in
2005, was a major business venture
launched by Mallya.
It eventually became insolvent and
had to be closed down. As of October
2013, it had not paid salaries to its
employees for 15 months, had lost its
license to operate as an airline, and
owed more than US$1 billion in bank
loans.
By November 2015 the amount owed
to the banks had grown to at least
$1.35 billion, and there were other
debts owed for taxes and to
numerous small creditors.
As part of the Kingfisher collapse,
Mallya is accused of being a "willful
defaulter" under Indian law, including
accusations of money laundering,
misappropriation, etc
 The Downgrade: BEGINS
2005: Vijay Mallya chairman of United Breweries (Holding) Limited, started the luxury airline: Kingfisher
Airlines.
2007: Vijay Mallya acquires Air Deccan, which was a low-cost airline, from owner Capt. Gopinath.
2008: The Air Deccan takeover was formalized and UB group paid up Rs.550 crores (US$79 million) for its
stake of 26% in the company. Later that same year Kingfisher Airlines faced a loss of Rs934 crore (US$133
million) due to various reasons like oil price increases, acquisition of a financially unsound airline and other
reasons.
2009: The consolidated debt of the airline accumulates to a massive Rs5,665 crore (US$810 million) that
increases to Rs7,000 crores (US$1 billion). IDBI bank issues a loan of Rs900 crores (US$128 million) to the
airline.
2010: Banks give the airline an ultimatum of nine months to pay back the entire loan amount that stands at
$1.3 billion. Kingfisher Airlines Board approves debt recast package. The airline’s debt now stands at
Rs6,000 crore (US$858 million).
2011-Mumbai International Airport Pvt. Ltd. sends a notice to the cash-strapped airline to pay Rs90 crore
(US$12million) outstanding dues.
The Income Tax Department freezes 11 accounts of Kingfisher Airlines for non-payment of tax.
2012: Kingfisher Airlines cancels several of its flights after the Income Tax Department froze some of its
accounts.
2013: DGCA asks the carrier to clear all dues, including pending salaries of employees, before seeking
license renewal.
2014: Kingfisher Airlines reported a net loss of Rs822.42 crore (US$117 million) for the third quarter
ended December 31, 2013.
2015: United Bank of India declares Mallya and three directors of Kingfisher Airlines as willful defaulters.
2016: Banks move Supreme Court to ban Mallya’s overseas travel.
Mallya leaves India on March 2, government tells court.
 My Observation

As per Section 166 of the Companies Act, 2013, the director of any company incorporated under
the Act has certain duties.
Firstly, the director has the duty to act in good faith to achieve the overall objectives of the
company and to act in the best interest of all its members, employees, shareholders, community
and environment.
Next, he is required to exercise his duties with due and reasonable care, skill and diligence and
exercise his own independent judgments.
He must not be involved in situations that may directly or indirectly be in conflict with the
interests of the company. Lastly, he must never achieve or try to achieve any kind of unjustified
gains for himself or for a person of his choice and if he does so can be liable for fine equal to the
amount of the undue gain.

1. Failing in his fiduciary duty to shareholders, employees, and investors

2. Non-Disclosure of Non-Compete Clause
3. Misuse of Power

“With great power comes great responsibility ”

 References
http://www.enforcementdirectorate.gov.in/faqs_on_pmla.pdf

http://theproofofguilt.blogspot.com/2015/06/section-82-crpc-and-proclaimed-
offenders.html

https://www.ft.com/content/b0072e74-0d3d-11e6-b41f-0beb7e589515

https://timesofindia.indiatimes.com/business/india-business/New-RBI-debt-recast-norms-
to-help-clean-up-bad-loans/articleshow/52738393.cms

https://www.nolo.com/legal-encyclopedia/fiduciary-responsibility-corporations.html

https://www.google.com/
Thank You