Billionaire Mallya Is Issued Warrant on Kingfisher Checks
By Sharang Limaye and Karthikeyan Sundaram - Oct 12, 2012 7:31 PM GMT
Vijay Mallya, the billionaire chairman of Kingfisher (KAIR) Airlines Ltd., may face arrest after failing to appear at a court hearing about the cash-strapped carrier bouncing checks.
A court in Hyderabad, in southern India, issued warrants for Mallya and four other executives, GMR Hyderabad International Airport Ltd. (GMRI) said in a statement yesterday. The airport operator initially filed a complaint because of four bad checks totaling 105 million rupees ($2 million), it said.
The order comes as liquor tycoon Mallya seeks investments for Bangalore-based Kingfisher, which has struggled to pay bills and wages for at least a year after posting five straight annual losses. The carrier halted operations on Oct. 1, when engineers and pilots walked out, demanding that seven months of unpaid salaries be settled.
“The warrant doesn’t mean Mallya is going to be arrested immediately,” said D. B. Goswami, a lawyer in private practice, who works on cases before India’s Supreme Court. “Check bounce is a criminal offense, but it isn’t something that’s out of the ordinary.”
Mallya can seek a cancellation of the warrant or request bail, Goswami said. Kingfisher Air hasn’t received any warrants, Prakash Mirpuri, a spokesman at the carrier, said in a statement.
Labor Dispute
A partial lockout, which Kingfisher had planned to end yesterday, is being extended through Oct. 20, Mirpuri said in a separate statement. The airline is “continuing to work with” employees to resolve the labor dispute, and it called on workers to halt the strike. Kingfisher is “hopeful” of resuming flights on Oct. 21, Mirpuri said.
Kingfisher fell 0.4 percent to 11.40 rupees at the close in Mumbai. Distiller United Spirits Ltd. (UNSP), Mallya’s biggest company by sales, dropped 2 percent. The benchmark BSE India Sensitive Index (SENSEX) lost 0.7 percent. Kingfisher, named for Mallya’s flagship beer brand, has dropped 29 percent this month.
India’s aviation regulator has asked the carrier why its permit shouldn’t be canceled or suspended following the shutdown. Kingfisher may be allowed to resume operations if it has staff to operate at least five planes, two officials at the aviation ministry said yesterday, asking not to be identified, citing rules. The carrier’s license can’t be canceled based on the current situation, they said.
Billionaire Mallya Is Issued Warrant on Kingfisher Checks - Bloomberg