The attempt by a State Bank of India-led consortium of lenders to auction Vijay Mallya’s plush ‘Kingfisher Villa’ in Goa — to recover dues from the defunct Kingfisher Airlines (KFA) — hit a wall with a no-show from bidders at the auction on Wednesday.
The reserve price for the villa, spread over 12,350 sq ft (three acres), was set at ₹85.29 crore.
The villa is owned by United Breweries (Holdings). Lenders had taken physical possession of the villa in May 2016.
Recovering the ₹7,000 crore lent to KFA is proving to be an uphill task for banks. Two earlier attempts — in March and August 2016 — to auction Kingfisher House in Mumbai was in vain.
Despite reducing the reserve price from ₹150 crore to ₹135 crore, there were no takers.
The move by banks to auction trademarks (including the brand value of the Kingfisher logo) in August 2016 too was unsuccessful. The reserve price for the brands was set at ₹330 crore.
Dull market“The real estate market is dull and bidders are wary of throwing their hat in the ring for a property which is under litigation,” said a banker clued in on the developments. Now, banks may have to lower the reserve price to attract bidders for the villa and Kingfisher House.
The Enforcement Directorate (ED) had, on September 3, issued its second attachment order for assets worth ₹6,630 crore against Mallya, as it seized his farmhouse, flats and FDs in connection with its money laundering case against him and his associates.
The provisional attachment order, issued under the provisions of the Prevention of Money Laundering Act, ordered the seizing of a farmhouse in Mandwa in Alibaugh worth ₹25 crore, multiple flats in Kingfisher Tower in Bengaluru worth ₹565 crore, fixed deposits of Mallya with a private bank to the tune of ₹10 crore and shares of USL, United Breweries and McDowell Holding Company, jointly held by the liquor baron and UBHL and his controlled entities, worth ₹3,635 crore.
“The total attachment under today’s order is worth ₹4,234.84 crore but the present market value of these properties and assets is ₹6,630 crore approximately,” the agency’s order said.