Saturday, March 12, 2016

Mismanagement killed Kingfisher but policy, regulatory hurdles also hastened its demise

Vijay Mallya has assured us through a series of angry tweets last night that he is no quitter, that he will follow the process of law in India. He has also indicated there is no need to question his assets since these are in the public domain, thanks to his stature as a Parliamentarian.
As chatter around his retreat to the UK and inability of India’s public sector banks to recover monies lent to him for Kingfisher Airlines grows, here’s a question that begs answers: Could a more benign policy and regulatory environment have helped arrest the steep decline of Kingfisher Airlines, perhaps prevented its demise?
At a time when anyone and everyone has been cursing banks and their tardiness in preventing Mallya from allegedly sinking up to Rs 9,000 crore of cash in the airline business, it is hard to even think if the government of the day could have done more to help Mallya destroy public wealth.
The popular sentiment is that banks crawled when asked to bend, that the UPA government bent over backwards to help Mallya. Kingfisher would have suffered even if these hurdles had been negotiated since it lacked an efficient management team till very late and decisions were taken arbitrarily. Never the less, here is a look at how harsh the policy, regulatory and competitive environment also contributed to Mallya’s ruin.
11/03/16 Sindhu Bhattacharya/First Post
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