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Vijay Mallya News: Banks dismiss Mallya’s settlement offer as ‘dead in the water’, try again to make him bankrupt | World News – Times of India

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LONDON: Indian businessman Vijay Mallya told the London high court that the assets he is offering to state-owned Indian banks to pay off the £1.05 billion (Rs 9,834 crore) debt he owes them exceeds the amount he owes and that their bankruptcy petition against him should be thrown out as the banks are fully secured creditors.
On April 9. 2020, chief insolvency and companies court judge Briggs adjourned the hearing of the petition by six months to allow the banks to submit an amended petition, ruling their first was non-compliant, and also to give Mallya a chance to pay his debts in full. At Tuesday’s hearing Briggs was hearing arguments as to whether or not Mallya’s debts are secured by the banks.
Mallya argued that the court should take into account the security held by banks over the assets of UBHL and his assets and thus dismiss their petition. The banks argued they did not have any security over his assets, that there were many other creditors queuing up for UBHL’s assets, and that they were in a battle with the ED over access to the assets.
“It was the banks who made a criminal complaint that led to the ED tying up these assets. The problem is that now the banks can’t realise their own security. They have created this mess of their own making,” Philip Marshall QC, representing Mallya, said. He added that the judgments of the DRT and of Justice Manmohan Singh, chairman of the PML appellate tribunal, Delhi, state the banks were “secured creditors”. He said that in the proceedings brought against Mallya in the PML Appellate Tribunal in Mumbai the banks also said they were “secured creditors”, yet in London they claimed they were not, which was inconsistent.
The banks claim Mallya owes them £1.05 billion (Rs 9,834 crore), including 11.5% annual interest, for not paying back loans taken from 2005 to 2019. Mallya has launched a legal challenge against the interest in India, claiming he owes between Rs 5,600 and Rs 5,900 crore.
“The banks want to recover from the assets the ED has attached and it should be sufficient to meet the undisputed portion of the debt as the rest is subject to an interest challenge,” Marshall said.
Marcia Shekerdemian QC, representing the banks, said that Mallya’s settlement offer “is dead in the water” as “UBHL’s assets are under the control of the official liquidator”, and yet UBHL’s assets “form an inherent component of this offer” and the majority of the value of Mallya’s offer.
“Mallya makes the argument before this court because he has a vested interest in trying to avoid bankruptcy; it is simply his latest attempt to avoid meeting at all costs the clear liability he has been found to have under the personal guarantee,” she said. She added that “the ability of the banks to proceed against assets ahead of not just the ED but all other creditors is at best up in the air. It has not been resolved.”
“The petitioners’ best estimate of the value of those Indian assets of which it is aware that Mallya says they have security over is circa £230 million, which clearly produces a very significant shortfall. The reality is that the assets held by UBHL are under the control of the official liquidator, who will be dealing with them in accordance with the statutory scheme in India. Mallya acknowledges that UBHL has Rs 4,413 crores in respect of other creditors which would still be a massive shortfall to the petitioners of between £51 million and £220 million. But the reality is that there will not be 100% recovery of assets direct to the petitioners as UBHL has around £0.5 billion of other unsecured creditors.”
The banks submitted an amended bankruptcy petition promising to give up their security over Mallya’s Indian property in the event that a bankruptcy order is made in the UK. Two individuals who claim Mallya owes them £2.3 million — Lois Appleton and Ellis McGlyn — are as supporting the creditors.
Judgment was reserved as to whether the judge should dismiss the petition taking into account whether the banks are secured (and if so, fully secured) over UBHL’s assets in India and assets belonging to Mallya and his family companies.


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