Mallya Offers $240 Million to Indian Court as Intent to Pay Debt

  • Tycoon asks court if he could disclose assets in sealed cover
  • Tells court his overseas assets are outside local purview

Vijay Mallya, the Indian ex-billionaire battling creditors seeking to recover dues, offered to deposit 15.9 billion rupees ($240 million) with India’s top court to establish his intent to settle with lenders who had rejected an earlier payment proposal.

Lawyers representing the founder of the collapsed Kingfisher Airlines Ltd., who the government says left the country earlier this year, filed an affidavit in the Supreme Court on Thursday in response to a directive to declare all his assets. The debt owed by the failed carrier is at the center of India’s drive to crack down on defaulters and clean up the balance sheets of its banks weighed down by soured loans.

Reiterating his earlier position, Mallya told the court he isn’t a “wilful defaulter” and the airline was “genuine commercial failure.” He was making all efforts to work out a settlement “in all sincerity” by offering to pay “to the extent possible and feasible” until the government suspended his passport and a court in Mumbai issued a non-bailable warrant against him, he said in the filing.

India’s foreign ministry, acting on an application by the Enforcement Directorate, said April 15 that Mallya had a week to respond to why his diplomatic passport shouldn’t be impounded or revoked, after suspending it for four weeks. The government says Mallya and Kingfisher owed as much as 90.9 billion rupees ($1.37 billion) as of Nov. 30.

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After five straight years of losses and mounting debt, Kingfisher was grounded in October 2012 as workers protested unpaid wages and lenders unsuccessfully attempted to revive the carrier, which ran up high costs in a bid to redefine luxury travel in India. The banks then named Mallya a "wilful defaulter."

In the affidavit to the court, he sought permission to disclose his assets in a sealed cover while adding he isn’t bound to reveal his overseas wealth as they aren’t mortgaged.

“Respondents remain ready and willing to try and achieve a negotiated settlement with petitioner banks,” Mallya said in the affidavit.

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