Vijay Mallya and the Kingfisher Airlines

Harsh Keswani

09 November 2020

Introduction to Vijay Mallya

India is one of the top economies of the world and the reason behind it is due to some of the big business houses that run most of the companies and industries in India. For example, the Tata group is one of the largest corporate firms in India having presence in almost all the sectors like manufacturing, aviation, defence, telecommunications, power, steel, automobiles, consumer appliances, consultancy, etc. Other big companies in India’s corporate sector include Reliance Industries, Adani Group, Infosys, Bajaj Auto, Grasim Industries, etc.[1] One of the companies that used to be among the list of top companies in India was United Breweries Group whose chairman was Vijay Mallya. Vijay Mallya still continues to be the chairman of the company but he lives a life which is very different from a normal businessman. This is due to the fact that Vijay Mallya is evading arrests by the Indian government as he lives in hiding in UK due to fear of extradition by Indian authorities. Mallya is considered as the top economic offenders in India as the enforcement directorate, banks, lenders and other entities are trying to get him arrested and extradited to India for the fraud he had committed.

Vijay Mallya was born to Vital Mallya in 1955, a businessman from the South Indian city of Bangalore. In 1983, Vijay Mallya became the chairman of UB Group and after that he expanded the company in a major way, diversifying the company into a multi-nation conglomerate and creating a beer brand that had more than 50% market share in the alcoholic drinks market in India[3]. The subsidiary company of UB Group, United Spirits, became the world’s second largest spirits under Mallya’s leadership[4]. However, in 2015, Mallya had to resign as the chairman of United Spirits and after one year, i.e., in 2016, Vijay Mallya allegedly fled from India to evade imminent arrests on money laundering and fraud charges. When he fled from India, he had a loan of approximately Rs. 9000 crores (US$ 1.3 billion) from 17 different banks of India. As of date, Mallya is facing extradition to India after he lost his appeal in the UK Supreme Court against his extradition plea[5].

Details of Crimes Committed by Mallya

According to Vijay Mallya, all the charges levelled against him are false. He maintains that he has been framed in a wrong way and he had done no evil while he was in India (as chairman of the UB Group, United Spirits and other associated companies). According to Mallya, he has been subject to a witch-hunt under a vicious disinformation campaign by the media houses[6]. The reason for this stance of Vijay Mallya was due to the fact that before 2010, he was not only managing the second the largest beer brand in the world[7], but was also operating India’s most successful low cost airlines – Kingfisher Airlines. Kingfisher Airlines was launched in 2005 by Mallya as he wanted his company to have a marked presence in India’s aviation sector. Mallya was an ambitious person and he wanted Kingfisher to expand in international operations. Since the government of India didn’t give permission to Kingfisher Airlines for international operations, Mallya acquired Air Deccan in 2007 – another low-cost airliner in India.

By the end of 2009, Kingfisher Airlines had become the market leader in the domestic aviation sector with 22.9 per cent market share[8]. However, the company started making consistent losses after the global recession of 2008 and by 2011 it declared having cash flow problems. In order to keep the business floating, it started taking loans from banks and financial institutions. By 2012, it stopped paying salaries to its pilots and other employees and finally in December 2012, the license of Kingfisher Airlines was cancelled which led to closure of all operations by the company. In 2013, the DGCA asked Kingfisher to clear all dues in order to seek renewal of its license. By 2014, United Bank of India had declared Mallya as a wilful defaulter.

Mallya left India on 2nd March 2016 on the same day the banks approached the recovery tribunal in India – the “Debts Recovery Tribunal” so that appropriate proceedings might be initiated against him and recovery could be done by the banks in accordance with law[9]. In addition to the charges filed by the banks against Mallya, Mallya was also declared as a “fugitive economic offender” in January 2019.

Details of the legal trial

The case against Vijay Mallya is being investigated by four investigation agencies, namely, Enforcement Directorate (ED), Central Bureau of Investigation (CBI), Serious Fraud Investigation Office (SFIO) and Securities Exchange Board of India (SEBI)[10]. Enforcement Directorate has found five instances where loan funds have been allegedly diverted. Mallya has been charged by Enforcement Directorate under sections 3 and 4 of the Prevention of Money Laundering Act (PMLA), 2002[11].

In addition to this, Mallya has been charged by Central Bureau of Investigation under sections 120B and 420 of the Indian Penal Code, 1860 for criminal conspiracy and cheating. Securities Exchange Board of India has accused Mallya of fund diversion by way of concealing financial statements and projections and producing false books of accounts[12]. Moreover, Vijay Mallya was also declared a fugitive economic offender by a special court under the Fugitive Economic Offenders (FEO) Act, 2018. A consortium of banks led by State Bank of India (SBI) moved the highest court of the country to stop Mallya from leaving the country on 16th of March, 2016. Mallya was directed to appear before the court and disclose the assets held by him, however, Mallya never presented himself before the co.

Case analysis

The rise and fall of Kingfisher Airline and the scam in the midst of all this raises important questions and issues around the Indian legal system.

  1. Even though Mallya kept on taking loans and also kept on defaulting on loans for so many years, there were no checks and balances in the Indian banking or regulatory system to stop issue of repeated loans to a high risk company. There was a big loophole in the banking and regulatory system of India which was exploited well by Mallya.
  2. This case also highlights the lack of transparency and coordination on the part of the public sector banks as they continued lending money even though the company was not able to pay salaries to its staff. This means they worked as if in a silo and had no communication within each other to flag the company as a NPA before it was too late.
  3. The matter becomes even more complicated as Article 9 of the UK-India Extradition Treaty offers security to such high-profile offenders if it can be proved that Mallya is being wrongly persecuted. Also, Article 9 of the same treaty prohibits extradition if the case is political in nature.


  1. Tata Sons Pvt. Ltd. (2020) Tata group Business Overview, Available at: (Accessed: 30th October 2020).
  2. Money Works (2020) Top Companies in India, Available at: (Accessed: 28th October 2020).
  3. Nag, K. (2018) The rise, fall and escape of Vijay Mallya, Available at: (Accessed: 29th October 2020).
  4. Unnikrishnan, D. (2018) Vijay Mallya’s rise and fall, Available at: (Accessed: 27th October 2020).
  5. Deccan Chronicle (2020) Mallya’s extradition from Britain not possible, India told, Available at: (Accessed: 29th October 2020).
  6. Business Standard (2020) Who is Vijay Mallya, Available at: (Accessed: 29th October 2020).
  7. Malviya, S. (2016) Carlsberg turns profitable in India, Available at: (Accessed: 28th October 2020).
  8. Almeida, A. (2020) Demystifying Vijay Mallya Scam, Available at: (Accessed: 1st November 2020).
  9. Business Standard (2020) Who is Vijay Mallya, Available at: (Accessed: 29th October 2020).
  10. Narayan, K. (2019) The cases against Vijay Mallya, Available at: (Accessed: 2nd November 2020).
  11. Upadhyay, J.P. and Sharma, S. (2017) The case(s) against Vijay Mallya and Kingfisher Airlines, Available at: (Accessed: 1st November 2020).
  12. Bhardwaj, A. (2020) How CBI convinced UK High Court, Available at: (Accessed: 2nd November 2020).