The e-auction of one of Vijay Mallya’s flagship properties failed to elicit a single bid, as many thought the reserve price of Rs 150 crore was too high
Banks looking to recover some money on Vijay Mallya’s bad debts met yet another defeat yesterday after they put his flagship property — Kingfisher House — under the hammer but didn’t find a single taker.
Kingfisher House was put under the hammer by SBI, which had lent Rs 1,600 crore to Kingfisher Airlines. Pic/Nimesh Dave
The 17,000-sq-foot property in Vile Parle, which once belonged to Mallya’s Kingfisher Airlines, has been seized by the SBI and was placed on an e-auction on Thursday at the reserve price of R150 crore. But builders pointed out that the price is too high for the sluggish market, and said a better tactic would have been to place it under direct auction.
Vijay Mallya who owes nearly Rs 7,000 crore to a consortium of banks led by SBI, had pledged this building to the banks. The banks had earlier moved the court but failed to prevent him from leaving the country. In order to get their money back, the banks decided to auction the property.
KK Motwani, of Motwani Developers, said, “The market is already bad; if the banks really want to get some money, they should lower the price. And, instead of holding an e-auction, they should keep it direct. In a direct auction, people get encouraged to bid more seeing bids from others, which isn’t possible in an e-auction.”
Another builder claimed that the price was too high, considering this was a distress sale and Kingfisher house is no heritage structure. “If they are serious about selling it then they should understand that they are selling a building that has got a name attached to it that no longer has any brand value. It’s a stress sale, not a heritage building that will have a premium,” he said.
According to another realty source, the building’s proximity to the airport is also a problem, since it limits the construction potential there. A spokesperson from SBI said, “We have no comment to offer, except that no one came ahead to bid for the Kingfisher House that was put up for e-auction.”
— Inputs from Agencies
King of bad debts
According to various reports, as of January 31, 2014, Vijay Mallya’s Kingfisher Airlines owed banks a staggering Rs 6,963 crore. All the banks have classified the loans as non-performing assets. Several reports claim that SBI is owed the highest amount of Rs 1,600 crore.
Vijay Mallya. File pic
The other banks are Punjab National Bank and IDBI Bank, which are owed around Rs 800 crore each. The loan amount from Bank of India is Rs 650 crore and from Bank of Baroda, it is Rs 550 crore. Central Bank of India gave a loan of around Rs 410 crore, while UCO Bank has to recover Rs 320 crore.
Corporation Bank has to recover another Rs 310 crore. Other banks like State Bank of Mysore, Indian Overseas Bank, Federal Bank, Punjab & Sind Bank and Axis Bank also lent money to the company.
Mallya seeks more time to appear before ED
Mumbai: Vijay Mallya has sought time till April to make an appearance before the Enforcement Directorate, virtually making it clear he would not be able to fulfil the summons issued by the agency, asking him to be present today.
‘Every penny will be recovered’
New Delhi: Amid the row raging over Vijay Mallya fleeing the country, Finance Minister Arun Jaitley yesterday said the banks will recover every penny given to him and investigative agencies will take strong action against the liquor baron wherever he is found to have violated the law. “Every government agency, whether its taxation department or investigative agency, wherever he has violated law, is going to take strong action. As far as banks are concerned, they are going to recover every penny of the rupee that they can from him,” Jaitley said.