It’s one thing being filthy rich. Living filthy rich, however, is a different ballgame altogether. Vijay Mallya fell into the latter. Mallya, hands down, was the most flamboyant businessman this country had ever seen. Private Jets, Calender Models, 150+ Supercars, and Yachts, he had it all. Once among this nation's most prominent business faces and a member of the Rajya Sabha, Vijay Mallya is today among the most wanted faces as a Willfull Defaultee of 9000+ Crores. Let’s see how that unfolded.
Vitthal Mallya, Vijay Mallya’s father, was the chairman of United Breweries Ltd. After he died in 1983, Mallya, then just 28 years old, took the company's reigns. The company’s turnover was about 350 Crores when he took over. Under his chairmanship, that shot up to 6000 Crores. Mallya dabbled in multiple industries like newspapers, speciality chemicals etc., but after figuring out liquor was his most profitable wing, he doubled down on expanding that business. UB’s Kingfisher beer held more than 50% market share in India at one point. Under his leadership, United Spirits, the flagship of United Breweries, became the second-largest spirits company globally by 2015.
Kingfisher Airlines was launched in May 2005, on Mallya’s son’s birthday. With no experience in civil aviation but tremendous experience in luxury and style, Mallya ensured his airlines met his standards. Known as the most luxury domestic airline, Kingfisher soon became the 2nd largest in India. However, as is the case with many airlines in India, Kingfisher was a loss-making entity. Despite these losses, Mallya purchased Air Deccan to expand to international routes. Air Deccan was close to completing five years in the industry before which no airline is permitted to go global. The fundamental motive was clear: Expansion (but not profitability).
Kingfisher’s aviation business kept amassing losses. Add to this the 2008 recession, high fuel prices, and Mallya’s obsession with providing luxury to passengers at low prices. Kingfisher was headed for a downfall. The situation was so bad that multiple airports denied landing to Kingfisher flights until they paid the landing charges upfront. Mallya tried getting Foreign Direct Investments, but the government did not allow this in the aviation sector. Kingfisher employees started striking and leaving the company by this point because the salaries weren’t being rolled out.
To handle this situation, Mallya now started taking loans; Massive amounts of debt from Public Sector Banks like SBI and IDBI. Oh, did we mention, by massive, we mean upwards of 1500 Crores? Private banks like HDFC and ICICI also gave out loans in exchange for equity in United Spirits as collateral. His political connections because of his tenure at Rajya Sabha and his business influence helped him secure these loans even though it was evident that Kingfisher Airlines was bound to fail.
In March 2016, when his total debt from 17+ banks exceeded a whopping 9000 crores, Mallya fled the country, demanding that all of the interest on his loans be waived off. Today he is among the most wanted economic fugitives in India. Recently, he lost an extradition trial but has figured out a way to stay a little longer in the United Kingdom using legal loopholes about asylums.
If you did not realise this, Public Sector Banks run through our money, the taxpayers of this country. There have been multiple accounts where the highly wealthy exploit the loopholes in PSU banking, and the government then pays the debt off. It’s doubtful if anyone wants their hard-earned money to be used this way.
Nonetheless, Vijay Mallya, the King of Good Times, is now a fugitive. He has an active Twitter feed where he keeps challenging the merit of all the allegations against him, but it doesn’t take a genius to figure out how severely he has defrauded this country.