The consortium of lenders, which includes State Bank of India (SBI), ICICI Bank, Axis Bank, which lent money to the beleaguered Kingfisher Airlines (KFA) in exchange for pledged shares, are apparently wondering about a legal course of action even as they are sitting on pledged shares from Vijay Mallya. According to a report in Business Standard, several lenders are unwilling to invoke their 2.38% pledge in United Spirits. This is bizarre move and makes a mockery of pledging shares. Why are the lenders, who are in the process of recovering their dues, unwilling to sell the pledged shares? What is the whole point of share pledging if it is not sold to recover amount due?
Earlier, the Bombay High Court rejected a plea from United Breweries (Holdings) for putting a halt to share sale by lenders. However, the high court ruled in favour of the lenders and allowed them to sell the shares freely in the open market . Why are the Kingfisher’s lenders not safeguarding their own interests and balance sheets? State Bank of India (SBI) is one of the largest banks in India and gets regular capital injections from the government. It is the taxpayer who has funded Kingfisher’s loan.
23/07/13 Moneylife
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Earlier, the Bombay High Court rejected a plea from United Breweries (Holdings) for putting a halt to share sale by lenders. However, the high court ruled in favour of the lenders and allowed them to sell the shares freely in the open market . Why are the Kingfisher’s lenders not safeguarding their own interests and balance sheets? State Bank of India (SBI) is one of the largest banks in India and gets regular capital injections from the government. It is the taxpayer who has funded Kingfisher’s loan.
23/07/13 Moneylife
