The State Bank of India, India’s biggest lender, said India’s news media was flouting established ethical norms in its reporting of the Vijay Mallya episode.
The media has been blaming state-owned banks for ‘going slow’ or showing a lack of due diligence when advancing loans to the businessman, who is now known to be in London.
“The Banks and in particular State Bank of India has taken all prompt actions in getting reliefs as required and there was no laxity on the part of the banks in seeking appropriate reliefs and it did all that was possible at its command,” the SBI said.
“The media reports are not supported by facts on record and are not only unfair but are in breach of established ethics and code of conduct to be observed by media.”
It took umbrage at reports that there has been laxity on part of the banks in seeking reliefs against Kingfisher Airlines Limited, its promoters and holding company.
“As leader of the consortium, we strongly deny the media reports which appear to be based on hearsay and conjecture without any reference to the factual position in the matter.”
Mallya, son of liquor baron Vittal Mallya, saw his business empire crumble in recent years under heavy debts. His entry into the highly competitive aviation sector is widely blamed for the predicament, but reports have argued that the problem could have been contained at an earlier level if his lenders had been more prudent in their assessment of their customer.
It is estimated that Mallya owes almost Rs 9,000 cr (around $1.3 bln) to state-owned banks. Most of this money will have to be made good by using taxpayer accounts.
“To set the record straight, we reaffirm that our bank moved very promptly on taking the appropriate legal steps required to protect banks’ interest and public money,” SBI said, proceeding to give a sequential description of what happened recently.
We reproduce the events, as SBI reports it, below.
The news item about settlement between Diageo, USL & Dr. Mallya was reported on 26/02/2016.
On 26/02/2016 itself, State Bank of India moved DRT (debt recovery tribunal) Bengaluru for advancement of the matter which was listed for hearing on 08/03/16. DRT advanced the matter to 29/02/2016 as 27/02/2016 & 28/02/2016 were holidays being Saturday & Sunday respectively.
As Senior Advocates had advised that it will not be possible to directly approach the Supreme Court for seeking reliefs in respect of the deal, State Bank of India additionally filed four applications in DRT Bengaluru seeking various reliefs.
On 2nd March, 2016 Hon’ble DRT Bengaluru heard arguments only on the application seeking garnishee relief against Diageo and USL and posted the matter to 4th March, 2016.
As Hon’ble DRT Bengaluru did not grant any relief on 2nd March, 2016, State Bank of India filed a writ petition before the Hon’ble Karnataka High Court on 3rd March, 2016 and requested the court to list it for hearing on 4th March, 2016.
Since no relief came forth from Hon’ble DRT or Hon’ble High Court, State Bank of India filed Special Leave Petition before the Hon’ble Supreme Court on 8th March 2016 (5th, 6th and 7th being holidays) seeking reliefs. Upon hearing conducted on 9th March 2016 the Hon’ble Supreme Court was pleased to issue notice as is known to all.
In this matter the consortium of banks are currently fighting more than 20 cases in various Courts including DRT from June 2013 and number of hearings held are in excess of 500 with more than 180 adjournments.