Former liquor baron Vijay Mallya’s offer of ₹4,000 crore to consortium of lenders which came with caveats was always a non-starter.
There was never even a whit of chance for the lenders to accept the offer because it was too little and would have allowed other debtors to make similar ones to get out of jail.
Therefore, it came as no surprise when the consortium informed the Supreme Court on Thursday that it had formally rejected the offer stating that nothing less than the full amount of ₹9,000-odd crore would be acceptable to them.
Mallya also now carries the additional burden of depositing a “substantial amount”’ to “prove his bona fide,” a condition set by the Supreme Court, on Thursday, which has also asked him to inform the court when he can appear before the Bench.
What the lenders have tried to communicate through their rejection is that it was too little and too late. Another factor, which could have made them reject the proposal, was the fact that they were under intense public scrutiny and any deflection from their stated position would have made them suspects in everyone’s eyes.
A few years ago, when Mallya was still not in the eye of the storm, efforts were apparently made to make him pay at least the principal amount, which is the same he wants to offer now. Not only did Mallya, it is learnt, refused to pay, he also filed cases in various courts preventing banks from invoking the pledged shares.
People privy to the interaction between Mallya and the representatives of the consortium say the former liquor baron knew that his offer had every chance of being rejected because if it had been accepted, there would have been multiple claimants and not the least, the Kingfisher Airlines’ employees themselves. Not just that, he would have also been asked to declare the source of the money which was on offer.
Caveats The offer also came with caveats. Out of the ₹4,000 crore on offer, half of it was to be paid upfront and the rest before September. Considering the fact that Mallya has been dodging the summons from the Enforcement Directorate time and again, it remained to be seen whether he would have paid the rest of the amount on time.
Another ₹2,000 crore, which Mallya offered to pay, was from the compensation amount he had claimed from International Aero Engines. Therefore, the money, which he would have paid to the lenders, was not his own and whether he would have received the entire amount he had claimed was also not certain.
Another issue which Mallya now faces is the summons from the Supreme Court asking him to set a date for his presence before the Bench.
He has so far not appeared before the Enforcement Directorate in spite of repeated summons being issued for his presence even though in his last press statement, he did claim that he respected the law of the land and was ready to appear before any agency and that he was not an absconder.
Mallya has far less room to manoeuvre now than when he started the new year with, and far less public sympathy and perhaps a fortnight more before the courts start losing their patience.