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Banks to Release Funds to Kingfisher on Humanitarian Grounds

  •   Sat, Oct 06 2012 09:48:30 AM

Mumbai, Oct 6 (PTI): State Bank of India today said Kingfisher lenders have decided to release funds to the debt-ridden airline on "humanitarian grounds" considering that its employees have not been paid fpr the past seven months.

"The money that has been released by the tax authorities, 80 per cent of that will be made available to the company on humanitarian grounds, specifically to pay salaries of the employees," SBI Chairman Pratip Chaudhuri told reporters here.

Sources had said bankers after an emergency meeting yesterday had agreed to release funds from escrow accounts, which is likely to fetch up to Rs 60 crore for the carrier.

SBI heads the consortium of 17 lenders to the crippled carrier. Chaudhuri, however, did not divulge the total quantum of the money banks were having.

Collectively, the 17-bank consortium has Rs 7,000-crore outstanding to the Vijay Mallya-promoted airline.

The SBI chief said that he does not know how much of a solace this would offer. "I don't know how adequate that (the release of money) would be."

The wife of a Delhi-based technician of the airline, which has been grounded since Sunday following a strike by its engineers and a section of pilots, allegedly committed suicide yesterday due to the financial troubles in the family and blamed the airline for it in a suicide note.

The Aviation Ministry and the sector regulator DGCA have been insisting to keep the fleet grounded unless concerns around safety and wages are solved.

The striking employees have been asking for an immediate payment of salary for three months out of the total seven months outstanding for resuming duties.

Chaudhuri said the only way forward for the banks is to be patient and wait for Mallya to get an investor.

"Banks are still giving time to Mallya to get an investor. Because if we pull the plug it would be irretrievable. And if we are patient with him, possibly there is a chance he would revive."

"If we pull the plug now then all possible investors would also walk away. Having waited for so long we might as well wait some more time," Chaudhuri said.
  

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Comment on this article

  • shubhada, kundapur

    Mon, Oct 08 2012

    The step taken by SBI is not correct. They are using tax payers money to bail out the company. The common salaried class is never shown any relief anytime. The salaried class goes through double taxation, one TDSfrom the salary and another tax on the interest on savings. so all the money that the banks or the govt has is tax payers hard earned money. We hav to take loans for our childrens education or to build a house. why cant we common people be given some benefit on humanitarian grounds. Vijay Mallya should sell off his assets for his employees and not suck on the common man's hard earned money.

    DisAgree Agree [2] Reply Report Abuse

  • avani, mlore/uae

    Sat, Oct 06 2012

    I am asking why cant he (Mallya) sell all his investment properties (immovable & movable) and get the KFAirline out of present trouble. Otherwise, whatever releif given by either Bank, tax authorities or govt means he is using common man's money to set right his mis management!!

    DisAgree Agree [9] Reply Report Abuse

  • OSWALD VAZ, THOTTAM/BAHRAIN

    Sat, Oct 06 2012

    THIS IS NOT A WISE DECISION FROM SBI SINCE,KINGFISHER IS MIS-MANAGED.WHAT THE HELL IT'S CEO & MANAGEMENT WAS DOING.ON WHAT BASIS SBI GIVING FACILITIES TO THEM DO THEY HAVE A FAIR KNOWLEDGE ABOUT IT.BETTER THIS LOSS MAKING AIR LINES TO CLOSE INSTEAD OF CREATING PROBLEMS IN THE COUNTRY.DO SBI WILL TAKE CARE OF ALL THE LOSS MAKING AIRLINES IN THE COUNTRY.IF MALLYA DON'T HAVE MONEY TO PAY LET HIM SELL HIS PROPERTY AND SETTLE THE EMPLOYEE'S DUES.

    DisAgree Agree [10] Reply Report Abuse

  • Joseph F. Gonsalves, Bannur, Puttur / Mangalore

    Sat, Oct 06 2012

    Thanks to SBI management so that the employees receive their salaries. First Kingfisher Airlines must settle the salaries of employees

    DisAgree [1] Agree [11] Reply Report Abuse

  • R.Bhandarkar., M

    Sat, Oct 06 2012

    When it comes to 'King Fish'the rules and ingredients of 'cooking'
    obviously change! You are not to ask- What's Cooking...!

    DisAgree [2] Agree [11] Reply Report Abuse


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