A court in Hyderabad has issued an arrest warrant for billionaire Vijay Mallya, owner of debt-ridden Kingfisher Airlines.
The non-bailable warrant was issued in the local sessions court over Kingfisher cheques to the operator of Hyderabad International Airport that bounced for Rs. 10.3 crore to the consortium running the airport in the city. The money was meant to cover landing, parking and navigation fees at the airport.
Kingfisher can approach a higher court for a temporary stay on the arrest warrant and it’s unlikely that Mr Mallya faces immediate arrest. But it wasn’t clear what his next move would be and several calls to a spokesman for the airline went unanswered.
“The cases were listed today for the airline to appear in the court,” said a spokesman for the complainant in the case, airport operator GMR Hyderabad International Airport Limited (GHIAL).
“Since they failed to appear before the magistrate, the court has ordered issuance of NBW (non-bailable warrants) against Kingfisher Airlines (KFA), Vijay Mallya and four other KFA officials,” the spokesman added.
Kingfisher, which has debts of around 7,000 crores, has not paid staff for seven months and is desperately seeking a foreign buyer to save it from complete collapse.
The warrant is the latest blow and comes after India’s civil aviation regulator issued a notice to Kingfisher, which has grounded its fleet for the last two weeks, threatening to cancel its licence.
Mr Mallya’s United Brewery Group is India’s largest brewer and owns other businesses in industries from chemicals to information technology. He also owns Force India – an F1 team and Royal Challengers, a cricket team that plays in the Indian Premier League. His net worth is $1 billion, according to Forbes.
But he has run into serious difficulties with Kingfisher Airlines, which was launched in 2005 and has never made a profit.
The company was India’s second-largest airline until a year ago but now it has a market share of just 3.2 per cent, the smallest of the country’s carriers.
The cash-strapped airline has stopped selling tickets on its website through October 20 and is still trying to convince pilots and engineers who haven’t been paid for months to return to work. The airline had promised to resume flights today.
The Directorate General of Civil Aviation (DGCA), India’s airline regulator, has asked the company to explain why its licence shouldn’t be revoked.
Kingfisher maintains that it will be able to engineer a turnaround and has pledged to provide India’s aviation regulator with a “comprehensive plan for restoration of services after negotiations with our employees” by October 20.