The Flight & Fall Of Mallya

Once upon a time, Vijay Mallya was ‘the king of good times’—till his airline imploded, dragging his liquor business down. Now the banks are baying for him and he has gone awol.

- Venkatesha Babu

The year was 1988. It was the dark days of pre-liberalisation and international acquisitions by Indian companies were unheard of. So when a 33-year old brash, swashbuckling Indian CEO announced in London the acquisition of Berger Paints—a company with a hoary history dating back to 1760—it created a stir. The corporate chieftain was Vijay Mallya.

There was a twist in the tale, though. After the London press conference, Naresh Malhotra, then CFO of the UB Group, received a phone call. It was Mallya. “Now that we have bought the company, go raise money to pay for it,” he reportedly said.

It was classic Mallya, moving first, getting the finance later. Mallya has always loved life on the edge. In 1992, our sister publication, Business Today, presciently asked on its cover, ‘Is Vijay Mallya Broke?’ A quarter century later, that question has cropped up again. His companies collectively owe a consortium of state-owned banks Rs 9,091 crore. Mallya exited the airline business in 2012, a major part of his liquor business in 2016 and, finally, exited the country on March 2 for the UK, waving his diplomatic passport, one of his perks as a Rajya Sabha MP. He is now believed to be living in a sprawling 30-acre country home in Hertfordshire, 46 km north of London.

He left behind an angry trail of bankers and political finger-pointing in Parliament—the Congress accused the BJP of having let him escape, the BJP accused the Congress of sanctioning the generous bailouts to him in 2010. On March 8, the Enforcement Directorate (ED) lodged a money-laundering case against him and the CFO of Kingfisher Airlines, A. Raghunathan. The ED is probing a suspected diversion of funds to an overseas tax haven.