In a rare letter to the media released on Tuesday, former liquor baron, Vijay Mallya, has said the CBI and Enforcement Directorate charges against him are “untenable and blatantly false allegations”, and they were acting at the behest of the government and lending banks.

Here is the text of the letter: "After a long period of silence, I feel the time has now come for me to state the factual position in response to the controversy unfortunately surrounding me.

I have been accused by politicians and the media alike of having stolen and run away with Rs 9,000 crores that was loaned to Kingfisher Airlines (KFA). Some of the lending banks have also labelled me a wilful defaulter.

The Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) have filed charge sheets against me with various untenable and blatantly false allegations acting at the behest of the Government and lending banks. The ED has also attached assets belonging to me, my Group Companies and companies owned and/ or controlled by my family under the Prevention of Money Laundering Act (PMLA) currently valued at approximately Rs. 13,900 crores.

In summary, I have become the “Poster Boy” of Bank default and a lightning rod of public anger. I wrote letters to both the Prime Minister and the Finance Minister on 15th April 2016 and am making these letters public to put things in the right perspective. No response was received from either of them.

The facts are as follows :


A) The Consortium of 17 Banks led by State Bank of India (SBI) made various loans to KFA of approximately Rs. 5,500 crores. Recoveries in excess of Rs 600 crores have since been made through the sale of pledged assets and a further Rs 1,280 crores has been lying deposited with the Hon'ble Karnataka High Court since 2013 (aggregating to in excess of Rs. 1,880 crores).

B) All loans, at all times, were duly approved at the appropriate levels and by the appropriate departments of each bank. Finally, all loans were restructured and consolidated under a Master Debt Recast agreement in December 2010 with permission from the Reserve Bank of India as the airline industry in India, as a whole, was undergoing great stress at the time. Thereafter, as late at January, 2012, SBI wrote to RBI explaining that the position was beyond KFA’s control whilst, inter alia, confirming that the promoters (UB Group) had infused substantial funds into KFA. A copy of this letter from SBI is also being made public.

C) Sadly, after the failure of KFA due to circumstances beyond its control, the Consortium of Banks filed proceedings before the Debt Recovery Tribunal for recovery of a principal amount of approximately Rs 5,000 crores plus unapplied interest of approximately Rs. 1,200 crores, totalling approximately Rs 6,200 crores. It is important to note that the principal amount involved remains at approximately Rs 5,000 crores (less the recoveries made from sale of properties and other recoveries made by the Recovery Officer, DRT) as against the various inaccurate amounts appearing in the media.


A) I made two settlement offers to the banks when proceedings were filed by them in the Honourable Supreme Court of India on 29th March, 2016 and 6th April, 2016. Against the then outstanding principal amount of approximately Rs. 5,000 crores, my first offer was for Rs 4,000 crores (plus the assignment of a claim in a pending suit of approximately Rs. 2,000 crore), which was subsequently revised to Rs 4,400 crores (plus the assignment of the claim in the pending suit of approximately Rs. 2,000 crores). These two offers need to be viewed in the context of One Time Settlements made between Public Sector Banks and Borrowers in the past and more recently the Bank partial recoveries with significant haircuts under the Indian Insolvency and Bankruptcy Code before the National Company Law Tribunal. These two offers are part of the public record in Supreme Court proceedings. Both offers were rejected by the banks – the second revised offer was rejected outright by a junior SBI officer present in Court without reference to any of the other Banks.

B) Thereafter, I wrote letters to the Chairperson of SBI on 10th May, 2016, 2nd June, 2016 and 10th June, 2016 seeking settlement discussions.

I respectfully submit that my conduct does not amount to “wilful default”.


A) A section of KFA employees have repeatedly complained about non-payment of salaries and consequent hardships. I sympathise with them.

B) It would not be out of place to mention that, under my stewardship, UB Group, at its zenith employed more than 66,000 people, most of whom served the Group for 20-30 years. If I was an inconsiderate person who did not believe in looking after employees, we would not have such a track record for so many decades.

C) The employees of KFA itself were happy and highly motivated, which enabled them to deliver the best service ever seen in the airline industry in India. Due to the unfortunate financial demise of KFA, sentiments turned against us.

D) The non-payment of salaries did not go un-noticed by me. As KFA’s flight operations were suspended by the DGCA in October, 2012, and thereafter, it’s air operator’s permit expired by efflux of time on 31st December, 2012, KFA was in no position to meet these expenses. Though not legally obliged to do so, at my request, UBHL made an application in early 2014 to the Supreme Court of India to pay a part of the salaries of KFA employees. Unfortunately, our application is pending and has not been heard.

E) I would be very happy if the Courts would permit utilisation of the substantial interest accruing on deposits of Rs. 1,280 crores made with the Hon’ble Karnataka High Court since 2013 for payment to eligible erstwhile KFA employees of their legitimate dues.

I respectfully submit that, for lack of understanding or otherwise and without any acknowledgement of KFA’s employee relations during operations, I am being singularly targeted.


A) The CBI charge sheet is premised mainly on (a) an alleged criminal conspiracy with the Chairman and Senior Executives of IDBI Bank, (b) alleged lies and dishonest misrepresentations made during the loan application process to induce the grant of loan (c) use of borrowed funds from IDBI and (d) dishonest conduct post default.

B) KFA had 17 Public Sector Lending Banks, including IDBI. All appraisals of KFA’s financial projections were vetted by SBI Capital Markets and Professional advisors. Each Bank, including IDBI, made their own lending decisions as per their own internal rules and procedures.

C) After SBI Capital Markets appraised KFA’s working capital gap to be Rs 2,000 crores in February 2009, KFA approached SBI, Bank of India, Bank of Baroda, United Bank of India and UCO raising an aggregate amount of Rs. 1,250 crores. The balance of Rs 750 crores was provided by IDBI.

D) Subsequently, in December 2010, all lending to KFA, including the IDBI lending was restructured and consolidated under the Master Debt Recast agreement with all approvals.

E) Detailed statements on the utilisation of all borrowed funds have been provided to the CBI.

F) The UB Group infused over Rs 4,000 crores into KFA and complete details have been provided to the CBI. In fact, in its letter to RBI in January, 2012, SBI has confirmed infusion of Rs. 1,158 crores by promoters up to December 2011 and a copy of the SBI Letter is also being made public. The balance infusions of funds are duly reported in KFA’s audited accounts.

I respectfully submit that the CBI charges have no merit whatsoever.


A) Two attachments have been made of assets valued in excess of Rs 9,600 crores on the pretext that Guarantors were refusing to honour their corporate/ personal guarantees to repay Banks which allegedly was a fraudulent intention, and hence, all assets have been treated as “proceeds of crime”.

B) The ED has even attached assets acquired in 1902, inherited assets and assets acquired even before KFA was formed. The question of using funds borrowed by KFA for acquisition of such assets cannot possibly arise. How then, can assets created before KFA existed be considered “proceeds of crime”?

C) The overreach of the ED misusing its vast powers under the PMLA is self evident.

D) The surprising fact is that the ED has objected in Court to my Group’s applications for sale of assets in order to allow me to repay creditors, including public sector banks.

E) I read a recent article in the media that the ED even objected to the public sector bank’s claim to the proceeds arising from the sale of my assets.

I respectfully submit that this is a clear example of politically motivated abuse of power with no legal basis whatsoever and behoves the fundamental question of whether the Government wants me to repay the public sector banks or not.


A) I have not seen the widely publicised recent ED charge sheet. However, the press reports suggest that it is premised mainly on (a) allegedly fraudulent borrowing with no intention to repay (b) siphoning of funds (c) misuse of funds for non-KFA purposes.

B) Fraudulent borrowing with no intention to repay is addressed through (a) Appraisals made by SBI Capital Markets and (b) Settlement offers and attempts to engage with the banks.

C) The siphoning of funds allegation is adequately dealt with by the fact that UB Group actually infused approximately Rs. 4,000 crores into KFA and that detailed statements have been provided to the CBI during the course of their investigations. It cannot be reasonably assumed that funds were siphoned out on one hand and even more funding infused on the other hand.

I respectfully submit that this is nothing but a witch hunt and yet another attempt to make me a “poster boy” yet again, this time under the recent Fugitive Economic Offender Ordinance.


A) I am tired of this relentless pursuit of me by the Government and its criminal agencies. All my efforts are either ignored or misunderstood.

B) Recovery of Loans is a civil matter which has been criminalised in my case. The CBI and ED moving aggressively to recover Bank loans is unprecedented despite my best intentions to settle with the Banks.

C) The CBI and ED seem determined to frame criminal charges against myself on the pretext of non-payment to Public Sector Banks. However, the motivation seems to be to secure my presence in India to face charges rather than to determine whether or not the evidence collected by the investigative agencies demonstrates whether there are any criminal charges which can be brought against me, or to permit me to actually sell available assets and repay creditors including Public Sector Banks.

D) UBHL and myself have filed an application before the Hon’ble Karnataka High Court on June 22, 2018, setting out available assets of approximately Rs. 13,900 crores. We have requested the Courts permission to allow us to sell these assets under judicial supervision and repay creditors, including the Public Sector Banks such amounts as may be directed and determined by the Court. A copy of our application is also being made public.

E) The bulk of the claim of the Public Sector Banks is on account of interest. On account of various injunctions, attachments and the refusal to grant permissions to sell available assets, the interest keeps mounting. Consequently, the bloated figure of outstanding dues to the Banks is largely on account of these mala fide actions.

F) If the criminal agencies such as ED or CBI object to my proposal, and object to the sale of assets, it will clearly demonstrate that there is an agenda against me beyond recovery of dues to Public Sector Banks.

I respectfully say that I have made and continue to make every effort, in good faith to settle with the Public Sector Banks. If politically motivated extraneous factors interfere, there is nothing that I can do. "