With Mallya in UK, banks seize Kingfisher trademarks

A group of Indian banks, seeking to recover more than $1 billion in loans from Kingfisher Airlines, has taken possession of nine trademarks related to the defunct carrier even as its its chief, erstwhile liquor baron Vijay Mallya, has skipped off to Britain.

Mallya built his fortune selling Kingfisher Beer and Indian-made foreign liquor in a market where imports are prohibitively taxed. A guarantor to the failed airline's debt, he left the country last week, a lawyer for the lenders told the Indian Supreme Court on Wednesday. The banks have asked the court to demand his return and to impound his passport.

Mallya, who is facing legal proceedings for allegedly defaulting on loans of over Rs9,000 crore from several banks, has been traced by the media to his country home in an English village about an hour's drive north of London.

The UB Group chairman and Rajya Sabha member is thought to have driven to his 'Ladywalk' estate in the village of Tiwen near St Albans in Hertfordshire from his London home near Baker Street earlier this week.

A Supreme Court notice for him to return to India is expected to be served to him through the Indian High Commission in London sometime this week.

Mallya had indicated last month that he wanted to move to the UK to be closer to his children and later denied he had plans to abscond.

''My statement as to my personal future after quitting Diageo / USL (United Spirits Ltd) - that I want to spend more time in England closer to my children – has been grossly distorted and mis-portrayed. I wish to reduce my business commitments gradually and devote more time to my family, and that my resignation from United Spirits was a step in this direction,'' he had said in a recent statement.

Mallya, who owns plush properties in California and the UK, has one of the country's biggest country homes on Queen Hoo Lane in the village of Tewin.

He likes to drop in at local pubs during his visits there but has not been spotted around the village so far this week, choosing to stay inside his 30-acre estate guarded by iron gates.

The latest twist in Mallya's fortunes has come at a time when authorities have pledged to clean up bank balance sheets, with the industry saddled by an estimated $120 billion in bad and troubled loans.

'Bordering on fraud'
Finance Minister Arun Jaitley told parliament today that the lenders will take every possible action to recover the debt from Mallya and other defaulters.

"As far as the government is concerned the clear instructions are that the banks must go all out to take every possible action," he said, adding there were some cases of "wilful default even bordering (on) fraud".

Mallya has been declared a wilful defaulter by the lender banks, implying he is avoiding repaying the loans despite having the means to do so.

Kingfisher stopped flying in October 2012 for want of cash, leaving creditors, suppliers and employees unpaid. It owed banks Rs9,091 crore ($1.4 billion) as of end-November, Jaitley said.

A spokesman for UB Group, Mallya's conglomerate, declined to comment on his whereabouts and the trademark seizure.

The trademarks seized include the "Kingfisher" label, "Flying Models" and "Fly the Good Times", according to a notice in newspapers by the banks' trustee, SBICAP Trustee Co Ltd.

Experts however say the seizing of the trademarks is a knee-jerk reaction by the banks, as nobody would want to buy these tainted brand-names.

Kingfisher beer is made by United Breweries Ltd which is part of Mallya's UB Group but now counts Heineken as its biggest shareholder.