Kingfisher House: State Bank of India to lead a consortium of banks to auction it

By auctioning Kingfisher House, Banks try to recover from Mallya, but is it a drop in the bucket?

A consortium of Banks led by SBI to auction Kingfisher House
A consortium of Banks led by SBI to auction Kingfisher House

Kingfisher House, the building that houses the headquarters of the grounded Kingfisher Airlines in Jogeshwari, Mumbai, will be auctioned on Thursday, in a bid to recover part of the ₹6,963 ($1.03 billion) crore debt.

In February 2015, the bank consortium, to whom Mallya owed crores, had taken over the Kingfisher House near Mumbai airport. The house, which served as Kingfisher headquarters, would be sold through e-auction. It has been valued at ₹150 crores ($22.27 million). The consortium has also taken over the Kingfisher Villa in Goa, worth around ₹90 crore.

On Wednesday, the Central Bureau of Investigation (CBI) was reportedly preparing official letters to some foreign jurisdictions to find out details of overseas properties owned by Mallya, who left the country on March 2.

As part of its ongoing probe into the ₹900 crore ($133.6 million) IDBI Bank loan default case, the CBI is planning to approach Britain, Mauritius, Cayman Islands and France, among others, to get details and “documented evidence” about the properties owned by Mallya.

Sources said the CBI was preparing documents to approach the court to get letters of judicial requests — called Letters Rogatory (LR) — issued to foreign jurisdictions. The LRs would also seek information on Mallya’s associates and the defunct Kingfisher Airlines.

The CBI’s move in the case would be a strategic step in view of expansion of the ambit of the investigation for including the alleged wilful defaulters pertaining to Kingfisher Airlines, the official told IANS on condition of anonymity.

“We are also focusing on finding out financial transaction details of Mallya and his associates,” the official said.

The agency decided to seek LR notices after a day-long questioning on Tuesday in Mumbai of former chief financial officers (CFO), A. Raghunathan, of Kingfisher Airlines and the UB group.

Raghunathan is an accused along with Mallya in the case registered by the CBI.

The CBI official said the IDBI Bank had, following his letters citing Mallya’s meetings with top bank officials, sanctioned short-term loans of ₹150 crore ($22.24 million) and ₹200 crore ($30 million) to the airline in October-November 2009.

Former UB Group CFO Ravi Nedungadi — who took voluntary retirement from service a few days ago — was also questioned along with Raghunathan.

The official said Kingfisher Airline’s owner Mallya, known for his flamboyant lifestyle, owes over ₹9,000 crore ($1.34 billion) to 17 banks so far the CBI had registered a default case of ₹900 crore ($134 million) involving the IDBI Bank. No other bank had approached the investigating agency so far.

The Enforcement Directorate, which deals with foreign exchange violations and cases under the money laundering law, is also looking into the same IDBI default by Mallya.

1. The conversion rate used in this article is 1 USD = 67.34 Rupees.
2. Text in Blue points to additional data on the topic.

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