London: Fugitive businessman Vijay Mallya, in a four-hour-podcast made with YouTuber Raj Shamani, made startling revelations, In the podcast, which was aired on Friday, Mallya blamed the Congress-led United Progressive Alliance (UPA) government for the downfall of Kingfisher Airline.
Mallya revealed that the airline operated smoothly until the 2008 global recession. He added that much of the trouble started in 2008 due to the global financial crisis.
When asked about what went wrong with Kingfisher Airlines, Mallya said that the problem was the government. “They made a lot of political hay out of this. When I used to write to Prime Minister Manmohan Singh, when I used to write to civil aviation ministers, and ministers of finance, the cost of crude went to 149 dollars a barrel. The price of aviation turbine fuel in India was directly related to International crude oil."
“From an average of about 60 dollars a barrel, crude oil went to 140 dollars a barrel, with the resultant and equivalent increase in the price of the aviation turbine fuel. The state governments levied an ad valorem of sales tax on aviation turbine fuel. You can imagine the finances of the airline operation,” Mallya added.
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He alleged that the Manmohan Singh government did not agree to exempt the turbine fuel from the sales tax levied by state governments. “I pleaded, please gave aviation turbine fuel, declare good status so that it could attract central sales tax and not this ad valorem states sale tax and that the government did not do,” he said
He further said that the government at that time did not permit the Foreign Direct Investment (FDI). “It was sad that only six months after Kingfisher Airlines shut that they permitted Etihad to invest in Jet. I had already reached an agreement with the CEO of Etihad in Geneva for them to invest in Kingfisher, which the government did not permit,” the fugitive businessman said.
“The economy, the circumstances and the government policies then existed all conspired to create a perfect storm through which Kingfisher could not survive,” Mallya claimed.
Here Is The Video (Between 1:30 - 1:35):
The fugitive businessman also said that he approached the then Finance Minister of the UPA government, Pranab Mukherjee, and offered to downsize his Kingfisher Airlines. However, as per Mallya, Mukherjee did not accept his request.
“I went to Shri Pranab Mukherjee...and said I have a problem. Kingfisher Airlines needs to downsize, cut the number of aircraft, and lay off employees, as I can't afford to operate under these depressed economic circumstances,” Mallya said in the podcast.
The fugitive businessman further revealed that his plan to downsize was rejected and he was offered support from banks.
“I was told not to downsize. You continue, banks will support you. That is how it all started,” he stated.
Rejecting the allegation that his intention was not to pay the loan, Mallya said that he offered four times to settle the loan but his offers were refused. He also said that despite 15 reminders he never received a formal statement of account. Mallya said that the amount of total debt of Rs 14,131.6 crore was only revealed in Parliament.
He also cited a Debt Recovery Tribunal certificate to refute media reports that the total amount of debt was Rs 9,000 crore. Instead, he said that the land amount was only Rs 6,203 crore.
Mallay also revealed that he informed the then finance minister Arun Jaitley before leaving India. “I told Finance Minister Arun Jaitley before leaving for the airport and then I flew to London from Delhi,” he said.
