ISSN 2330-717X

Revival Of Kingfisher Saga Is All About Money, Not Justice – OpEd

By

By Prashant Kumar*

It is hard to forget the scenes in 2012 when hundreds and thousands of Kingfisher Airline employees marched in various parts of the country demanding justice of compensation for what seemed like the inevitable shutdown of their livelihood. Thousands marched against the inaction of the then UPA government, which seemed to be protecting ‘the flamboyant millionaire’ Vijay Mallya and his extravagant lifestyle instead of prosecuting him for defaulting on repaying bank loans. Despite being denied their pay for months, employees – who were persuaded by Mallya’s pleas and their loyalty – remained in the company. The end result: Kingfisher shut down in October 2012, leaving employees scared, scarred and sunk. The flamboyant millionaire continued to enjoy his flashy lifestyle, the government continued to protect him even at the expense of his employees and when news ratings finally dipped, the story was all but forgotten.

Fast forward four years. The Kingfisher scam is back in the limelight due to the heavy burden of unrecovered loans and a government keen to ensure accountability in the system. Former employees, owed lakhs by the failed company, are filling the airwaves among experts and critics, trying to make the most of the renewed attention on the issue. In the meantime, Vijay Mallya, who has so far expertly navigated his way around any prosecution has duped another central government and fled the country. As usual, the scam has become fodder for prime time news, ammunition for rival political parties and material for further stalemate in Parliament.

Interestingly enough, the Congress vice president and the de-facto head of the opposition, has suddenly found his voice. While he was mute when the Kingfisher crisis first played out, Rahul Gandhi is now demanding of the government to answer how Mallya was allowed to escape. Given that the tycoon enjoyed four years of freedom, two of those during UPA II rule, for Mr Gandhi to now be bewildered by Mallya’s nick-of-time departure is rather insulting to all those who were depending on this stroke of lightning in 2012.

Just prior to Kingfisher’s inevitable demise, Vijay Mallya wrote to his employees, imploring them to continue to be loyal to his company, promising monetary incentives to those who decided to stay. Those, who saw the writing on the wall, left. Others, a majority of them, stuck by him. The aftermath of the Kingfisher crisis was reminiscent of economic collapses around the world, albeit at a much smaller scale. People were left unemployed, with no job prospects in sight. The lasting effects of the global financial crisis, which penetrated deep into the aviation industry, made finding similar jobs near impossible. Families accustomed to the relatively lavish standard of living that aviation usually provides were left desperately trying to make ends meet with jobs at call centres or contractual/part-time employment. The wife of one Kingfisher employee committed suicide.

But this is not the reason why the Kingfisher story is in the news today. The consortium of banks that lent Mallya somewhere close to ₹9000 crore are finally feeling the agony of red ink in their accounts. The resurgence of the Kingfisher scam is not about the fact that Mallya still owes each employee six months or more worth of salaries, as well al bonuses and incentives promised in contracts or the fact that the company deducted taxes on employee salaries without depositing them in government coffers. It is about the inability of large banks in the country to recover their investments in what was deemed a non-performing asset as far back as 2013.

Mallya has spent nearly ₹76.3 crore on IPL players since 2013; ₹4 crore on a race horse in 2014. Former KFA CEO Sanjay Aggarwal was paid ₹3 crore in 2013. Mallya has just been paid ₹504 crore to step down as chairman of United Breweries. And yet, the ₹365 crore needed to settle accounts with Kingfisher’s former employees has been mentioned by perhaps only one major news channel.

What remains most disturbing is how successive governments have continued to ignore the concerns and plight of employees to protect one man. The political connectivity of one rich individual cannot outweigh the financial insecurity of nearly 3000 households. Ironically, Kingfisher employees paying loans to banks were forced to use collateral, while the owner on flew the coop.

The only thing this newfound interest in the Kingfisher saga shows is that regardless of the political slogans of being ‘of the people´ what matters in India, to set the machine (judicial or federal) in motion, is money. Only when the ledger finally starts to bleed does anybody notice injustice.

This commentary originally appeared in the The Huffington Post and reprinted with permission.

Observer Research Foundation

ORF was established on 5 September 1990 as a private, not for profit, ’think tank’ to influence public policy formulation. The Foundation brought together, for the first time, leading Indian economists and policymakers to present An Agenda for Economic Reforms in India. The idea was to help develop a consensus in favour of economic reforms.

2 thoughts on “Revival Of Kingfisher Saga Is All About Money, Not Justice – OpEd

  • Avatar
    March 17, 2016 at 2:42 pm
    Permalink

    Good story. What the share holders, who spent their hard earned money buying kfa shares, going to get? What justice is available to these lakhs(many hundreds of thousands) of SMALL INVESTORS.

    Reply
  • Avatar
    March 17, 2016 at 3:40 pm
    Permalink

    I know Airlines business is not as simple as running a computer firm. Many regulations have to be adhered to.

    But I remeber that after IBM was out of India its employees took over and CMC was formed by them.

    Kingfisher assets are still available ( albeit with a stay from banks who loaned money ) but the machinery was run by employees , not Mallya alone.

    Why can’t employees takeover from this point and surely, since their technical skills are proven, loanee institutions can be convinced.. after all they will have the dead assets being revived.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.