Vijay Mallya, the liquor baron who was called the king of good times now knows that his luck may not last forever. The flamboyant businessman turned politician and Member of Parliament who left the country on March 2 for London owes about Rs 9,000 crore to a consortium of banks in India. The banks and the government are twiddling their thumbs as to how to bring him back.
The banks woke up belatedly to prevent Mallya from leaving the country in vain this week. Mallya has been facing mounting debts since 2012. His Kingfisher Airlines was grounded in October 2012 because of his huge debt and he knew that it was only a question of time before the law caught up with him,
His flight out of India has led to a political slugfest inside and outside Parliament with both the Congress and the BJP accusing each other. Congress leader Ghulam Nabi Azad has even accused the Modi government of being a party to the criminal conspiracy. The point is that Mallya had also been promoted and protected by the previous governments. As Finance Minister Arun Jaitley rightly pointed out the first banking facility was given to Mallya and his companies in September 2004, which were renewed in February 2008.
Though on 30 April 2009 Mallya&’s accounts were declared non-performing assets, the debts were restructured and more loans were given to him in December 2010 pointing a finger at the UPA government. He had godfathers in the present government too.
The Mallya story shows clearly how the rich and powerful can get away as the law is not equal in this country. This reminds one of the earlier such episode when Italian businessman Ottavio Quattarochi quietly escaped. In recent times the former IPL chairman Lalit Modi too had become an absconder, now living in London.
The irony is that Mallya is not the only businessman who had cheated banks, by not paying back Rs 9000 crore. Reports suggest that there are about 30 top companies, some of them much bigger fish, that owe nationalised banks a whopping Rs 1.21 lakh crore, which is almost 40 per cent of the NPA. Even the Supreme Court had recently ticked off the Reserve Bank of India over reports that the banks had written off Rs 40000 crore of corporate loans in 2015 alone. Mallya is only one of the beneficiaries of crony capitalism.
Why are the Mallyas of India growing and even become members of Parliament using their money power? Congress Vice President Rahul Gandhi asked Modi, "When a poor man steals, he is beaten up and thrown into jail. Someone who does not have food to eat and steals a roti is beaten up and put behind bars and a big businessmen who steals Rs 9,000 crore from country, you allow him to escape in First Class from the country. What is happening? “ The question is quite relevant but he should also ask his own party-led governments which allowed the escape of
Quattrochi who was involved in the Bofors gun deal and the former IPL chief Lalit Modi. Mallya came toParliemnt with the support of the BJP and Janata Dal (S). So in a way, neither the BJP nor the Congress governments can escape blame as they had supported crony capitalism. It is not uncommon for business tycoons to use their money power to become MPs to further their business prospects. Other business tycoons send their proxies to protect their interests both in Lok Sabha and Rajya Sabha. They sit in parliamentary committees despite conflicts of interest. They try to manipulate the system.
So what could be done to stop them?
The Mallya case should not be treated as an individual aberration especially because the RBI-ordered clean up exercise is currently on. While bringing Mallya back to the country to face the the law might be a long-drawn out and tedious process the political bosses should now address the bigger question how to deal with crony capitalism.
No doubt the system can be cleaned if there is a political will and the parties do not look to businessmen to fund their elections. This practice of encouraging money power to come into Parliament should be checked.
Secondly, it is atrocious that the banks were defrauded to the tune of Rs 1.25 lakh crores. In the case of Mallya why was he not arrested earlier and put in jail or his properties attached when he had not even paid his employees their back wages or deposited their provident fund and TDS?
Thirdly, the banks should be asked to implement laws for all and no preferential treatment should be meted to out rich defaulters. Can an ordinary man escape even if he has not paid his EMI when he buys a car or a scooter with bank finance? Does not the bank take away his vehicle? How come the law is not applicable equally?
Fourthly, the government should free the banks from its control and should not put pressure on nationalised banks to lend money. They should be made accountable for they are after all dealing with the public and they cannot rob the poor to benefit the rich corporates.
It is time that the political bosses address these questions and sincerely try to correct the faults in the system. Prime Minister Modi had vowed to fight corruption. It is perhaps time to begin his fight against crony capitalism.
The banks woke up belatedly to prevent Mallya from leaving the country in vain this week.