New Delhi: An internal report of the IDBI Bank had warned UB Group Chairman Vijay Mallya that his aviation company, Kingfisher Airlines, was in the red, but despite the report since 2009 the bank has sanctioned loan to the airline of over Rs 900 crore.
Mallya, known as the King of Good Times, is confronted with some tough times as Kingfisher Airlines is in deep financial trouble and banks are unwilling to trust him anymore.
However, CNN-IBN has accessed internal bank reports prepared by the IDBI Bank in 2009 that show how Mallya's airline and his own personal assets were deep in the red. The report was prepared in November 2009 on Kingfisher's request for a lone of Rs 150 crore for six months.
The report reads: "The company's financial position is unsatisfactory as reflected by substantial gross loss and net loss during FY 09 and accumulated losses, eroded net worth and high debts. As on March 31, 2009, debt levels to the tune of Rs 5665.55 crore indicating a major risk burden on the banking system. Final conclusion, proposal doesn't comply with minimum internal credit rating."
The conclusion should have meant that Kingfisher should never have been given the loan. Kingfisher's request should have been turned down, more so as questions were raised even about Vijay Mallya's net worth in the report. Instead the loan was approved by the bank.
16/11/11 Bhupendra Chaubey/CNN-IBN/IBN Live
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