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.
