Mumbai: A probe by the Serious Fraud Investigation Office (SFIO) has found that Kingfisher Airlines Ltd (KFAL) purchased an Airbus corporate jet A319-100 for non-scheduled air transport services operation in November 2006 but it was allegedly diverted for personal use of company chairman Vijay Mallya and his “family members as well as political and personal friends”.
The jet, the SFIO noted, was purchased when the financial position of the airline was “precarious” and “the entire share capital including reserves were completely eroded”.
According to SFIO report, the KFAL applied in February 2006 to the Ministry of Civil Aviation (MOCA), seeking a no-objection-certificate (NOC) for import of a jet, now registered as VT-VJM. But the airline, the SFIO found, also applied to the MOCA for a separate NOC to use the same jet for overseas travel of Mallya, senior employees of UB Group and for “VVIP tourism and chartered trips to various destinations world over”. The NOC was also sought on the ground that surplus income would be generated from operations of the corporate jet.
Kingfisher financed the purchase through a financial lease agreement with a firm in Cayman Islands. The SFIO report said Kingfisher capitalised the purchase cost of Rs 293.2 crore in its books. It also booked the lease interest, lease rentals and operational expenses.
The SFIO investigation showed that the jet “was never used” for non-scheduled air transport passenger services, as claimed before the Directorate General of Civil Aviation (DGCA) and MOCA. The jet was mainly used as a personal carrier for Mallya, the report stated.
08/10/17 Khushboo Narayan/Indian Express
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The jet, the SFIO noted, was purchased when the financial position of the airline was “precarious” and “the entire share capital including reserves were completely eroded”.
According to SFIO report, the KFAL applied in February 2006 to the Ministry of Civil Aviation (MOCA), seeking a no-objection-certificate (NOC) for import of a jet, now registered as VT-VJM. But the airline, the SFIO found, also applied to the MOCA for a separate NOC to use the same jet for overseas travel of Mallya, senior employees of UB Group and for “VVIP tourism and chartered trips to various destinations world over”. The NOC was also sought on the ground that surplus income would be generated from operations of the corporate jet.
Kingfisher financed the purchase through a financial lease agreement with a firm in Cayman Islands. The SFIO report said Kingfisher capitalised the purchase cost of Rs 293.2 crore in its books. It also booked the lease interest, lease rentals and operational expenses.
The SFIO investigation showed that the jet “was never used” for non-scheduled air transport passenger services, as claimed before the Directorate General of Civil Aviation (DGCA) and MOCA. The jet was mainly used as a personal carrier for Mallya, the report stated.
08/10/17 Khushboo Narayan/Indian Express
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