Thank you for your reading and interest in the news Indian tycoon Vijay Mallya staves off bankruptcy as his empire crumbles and now with details
Hind Al Soulia - Riyadh - Blessed with sun and ocean views, the luxurious estate with a private nightclub on the historic Mediterranean island of Île Sainte-Marguerite needed an owner with deep-pockets and a passion for partying. Enter the Indian tycoon Vijay Mallya.
The self-styled King of Good Times was flying high when a company linked to the tycoon bought the island paradise in 2008 just a short hop from its private helipad to Cannes in the French Riviera. His airline, brewing empire and newly-acquired Formula One racing team were all apparently in rude health.
With its swimming pool and 12th century residences overlooking the ocean, the estate was the perfect party pad for the famously extrovert Mallya described in court papers as a “glamorous, flashy, famous, bejewelled, bodyguarded, ostensibly billionaire playboy”.
But 12 years later, as he fights extradition to India for fraud and money laundering, the story of his high-class bolthole has shed light on his crumbling financial empire - and the desperate efforts of creditors to get back their money.
It emerged this week that Mr Mallya has staved off the immediate threat of bankruptcy after being pursued by 12 Indian state-owned banks for the return of £1.05 billion.
Judge Michael Briggs said in a ruling published on Thursday that the tycoon should be given time for his own counter settlement offer to work its way through the Indian legal system. The judge granted the extra time amid a dispute over whether there are enough funds to satisfy the claimants.
The ruling, made in December but published for the first time this week, said further legal arguments would be heard after June 1. They are in doubt because of the coronavirus crisis.
The battle over the future over the assets of the once-powerful Mallya empire is playing out in courts in the UK, where he is currently living, which have underscored the tycoon’s financial plight.
He accepts that he owes huge sums to the banks, but contests the amount, the papers show. Mr Mallya claims that he was the target of a political witch-hunt that led to the downfall of his drinks-to-airline empire.
Many of those arguments played out during an extradition hearing in 2018 which ruled that Mr Mallya should be returned to India to stand trial. As he appeals against that judgment, banks and creditors have continued to circle the stricken businessman to get their money back after his dramatic fall from grace.
Mr Mallya fled to the UK from India in 2016 leaving behind debts of more than $1 billion and pursued by investigators and police who accused the tycoon of misusing loans for his ailing Kingfisher airline.
Some of the money from the loans for the airline was pumped into a vanity project, his Formula One team, which collapsed in 2011.
But even when the deal was struck through a related company for the island estate on 1.3 hectares of land once owned by the French monarch Louis XIV, Mr Mallya’s business interests were in decline. His aspirational airline Kingfisher, launched in 2005, was already struggling at the time of the purchase.
It was “running out of money” as it struggled from the impact of high fuel prices and a price war during the carnage of the 2008 financial crisis, according to court papers.
The estate on the island, made famous through literature for its fortress prison that housed the ‘Man in the Iron Mask’ in the 17th century, was purchased with the assistance of a 27-million-euro loan from London-based private bank Ansbacher, newly-taken over by the Qatar National Bank (QNB).
The loan was due to be repaid in 2015 but with his business empire in dire straits the repayment period was extended twice.
The second extension was only agreed in February 2017, when a mortgage was agreed on a superyacht, Force India, as additional security on the loan.
That extension was signed off at a particularly sensitive time for Mallya as Indian authorities asked the UK to extradite the businessman over allegations of fraud and money laundering.
Loan repayments were halted to QNB by January 2018 and the bank sought to sell the superyacht to recoup some €17 million, according to a ruling in January. His lawyers claimed that the 50-metre yacht – along with three properties in England - were owned by other members of his family.
In January 2018 the yacht, Force India, was seized in the south English port of Southampton and a judge ordered its sale to pay off the debts. It could not be moved while Mr Mallya continued under a global assets freeze secured by creditors.
About 20 potential buyers inspected the vessel – marketed as a “true performance yacht with incredible top speeds” with its “beautiful furnishings and sumptuous seating” with an asking price of some 14 million euros.
But a judge dramatically halted its sale in March after some 17m euros was paid to settle the debts.
The payment cleared the way for the sale of the island estate, which was being marketed for $51 million, to a Swiss luxury property firm.
The complex deal highlighted the difficulties of unravelling the Mallya assets that the courts have heard were held through a network of complex ownership structures.
The bankruptcy ruling, published on Thursday, said that Mr Mallya claimed the sale of his brewing assets and other companies “owned and controlled by family members” would be made available to the banks.
And in a tweet last month, Mr Mallya said he had made “repeated offers to pay 100 per cent of the amount” borrowed by Kingfisher airlines to the banks. He has claimed the collapse of the airline was caused by a surge in fuel costs and mechanical mishaps.
The court heard claims that assets of £1.6 billion had been seized or secured by the banks and the Indian authorities.
Mr Mallya claimed there were sufficient assets to meet the debts.
“The banks say otherwise,” said Judge Michael Briggs in his ruling.
Updated: April 10, 2020 06:44 PM
These were the details of the news Indian tycoon Vijay Mallya staves off bankruptcy as his empire crumbles for this day. We hope that we have succeeded by giving you the full details and information. To follow all our news, you can subscribe to the alerts system or to one of our different systems to provide you with all that is new.
It is also worth noting that the original news has been published and is available at The National and the editorial team at AlKhaleej Today has confirmed it and it has been modified, and it may have been completely transferred or quoted from it and you can read and follow this news from its main source.