The title of this post may seem a bit odd considering the video of Vijay Mallya being harassed by Indians during the world cup and that is what prompts me to write this.
Vijay Mallya has offered to pay back the entire principal amount in writing to the courts. He has said that on many forums that he is willing to pay back the money owed by his company. The only thing that he wants is fair negotiation with the lenders where they let go of the interest part.
Now let us consider some other businesses that have gone kaput
Jet Airways which was touted as success when Kingfisher was going bankrupt has now gone to a bigger failure then it.
Videocon industrializes with more than 40000 cr debt has gone to the ICU
Reliance communications with a debt of over 450000 cr been confined to the bankruptcy tribunal
and not a single rupee has been offered by promoters to lenders
And add to this a Birla scion not paying a paltry sum of 70 crores to the bank in contrast to Vijay Mallya who I willing to pay more than 5000 cr
And all these businesses and many more Ruias and others are not willing to pay a single paisa to the lenders instead, they have the gall to bid for the same business w has gone bankrupt because of their management.
Vijay Mallya has been derided, laughed and ridiculed by all. Industry veterans have laughed at him saying that he only had beautiful models and no business model, his appearance on all page 3 parties, Photographs of him with stunning beauties, his lifestyle and everything else associated with it has been laughed at but he was just living his brand and personifying it.
Kingfisher was branded as a lifestyle brand and there was an attempt from Mallya side to provide a larger than life experience to the passengers and it is obvious that t filed but that does not turn him into the monster that he is being protected. He is just a businessman who took a huge gamble and failed.
But the question is that who is lending money to these pipe dreams. Every businessman is leveraged to the hilt and that goes for even Mukesh Ambani and these loans have been granted by relaxing the norms that were sacrosanct earlier. As banks align their lending practices to global standards the security that is taken as collateral and its definition have been tweaked by the government and the RBI.
For example, RCOM assets include its spectrum as an asset which was purchased from loans from the banks and it was taken as good enough collateral but now it is of no values in the same way as spectrums of AIRTEL, VODAFONE, IDEA and will be of no value once we progress from 4G to 5G. Jio has obsoleted 2G and 3G. And soon Jiu will be obsoleted as 5G auctions are initiated then again the same cycle would repeat and you would have JIO and other players buying spectrum by putting the same spectrum as collateral.
That is one example other practices include turning debt into security and many more exotic deals that have become part of our banking system.
So basically it is the bankers who should be held responsible for not securing the loan and Vijay Mallya should be given a hero’s welcome back to India because he is willing to pay the entire principal instead of taking Kingfisher to the bankruptcy process wherein no one is going to receive anything.
So yes he is the most ethical businessman around today remember that when you see another media story that mocks him.