The Vijay Mallya-promoted Kingfisher Airlines is under more trouble as the Central Bureau of Investigation (CBI) has started investigating the loans granted by State Bank of India (SBI) to the crisis-hit airline.
“We are examining the borrowing in respect of one public sector bank and the investigation is in progress,” a CBI official told Business Line.
The official said that the investigations are in the early stages. Kingfisher Airlines owes nearly Rs 6,500 crore to banks and financial institutions. One-third of it is loans from SBI.
A media report published on Monday said that Mallya-owned airline pocketed funds while leasing aircraft. It is suspected that the airline sought loans based on inflated leasing quotations, which were false. However, the actual leasing rates were low and the difference was kept by the airline.
While Kingfisher Airlines was flying, it was operating more than 60 aircraft, while it owned three. The remaining were on lease.
Though Kingfisher stopped operations in October last year, leasing companies are finding it difficult to take back the aircraft that they had leased out to the airline because entities like airport operators, who have also lent money to Kingfisher Airlines, want their debts to be cleared before allowing the aircraft to leave the Indian shores.
Meanwhile Kingfisher Airlines in a statement said that the airline sold and leased back aircraft from major international lessors who would only pay fair market prices. No Indian bank has financed such aircraft acquisitions, it added.
“KFA took loans from Indian Banks called PDP loans typically amounting to 15 per cent of the aircraft purchase price from Airbus. Upon delivery of the aircraft and completion of the sale and leaseback transaction, Airbus directly refunded the PDP amount to the banks,” Kingfisher said.