Banks to sell Vijay Mallya’s shares in 3 companies on June 23 to recover Rs 6,203 crore

The fugitive businessman had escaped to the UK in 2016 while he owed Rs 9,000 crore to 17 Indian banks. Since then the central government and the duped banks are trying to get him extradited back to India. 

A consortium of banks in India led by the State Bank of India will be selling the shares owned by businessman Vijay Mallya in 3 companies next week on June 23, according to a report by moneycontrol.com. The three companies in which the ‘fugitive economic offender’ owned shares are- United Spirits Ltd, United Breweries Ltd and McDowell Holding Ltd.

It may be recalled that Vijay Mallya’s flagship Kingfisher airlines closed down in 2012 after facing a financial crisis. The businessman had escaped to the UK in 2016 while he owed Rs 9,000 crore to 17 Indian banks. Since then the central government and the duped banks are trying to get him extradited back to India.

The selling of shares will enable the banks to recover an amount of Rs 6,203 crore along with an interest of 11.5% applicable from June 25, 2013 to the date of recovery. According to moneycontrol.com, the shares of the 3 companies would be sold under the monitoring of Bengaluru Debt Recovery tribunal which has given authority for the same.

The shares would be sold through bulk deals as the banks believe that selling them directly to the public may have an adverse effect on the price value of the shares. The bulk of the shares to be sold, 4.13 crore in number, are of United Breweries followed by 22 lakh shares of McDowell Holding and 25.02 lakhs shares of  United Spirits.

If the share sale process doesn’t go through, the banks can sell the shares either in bulk or retail mode from June 24. The consortium of bankers defrauded by fugitive Vijay Mallya include State Bank of India, Federal Bank, Bank of Baroda, IDBI Bank, Punjab National Bank among a few others.

If the process of selling shares is successful, it will mark the first major success for the banks in their quest to recover the loan amount. The banks got a further relief on May 24 when a PMLA court authorised the consortium of banks to take over Mallya’s properties seized by the Enforcement Directorate(ED). Thus, the banks can now also auction the properties as well to recover their loan dues. The ED has till now attached assets of a total worth of about Rs 12,000 crore.

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