SBI Withholds Kingfisher Asset Sale Proceeds, Employees Await Unpaid Dues

Quick Summary:

• The official liquidator informed ex-Kingfisher Airlines employees that payment delays persist as the State Bank of India (SBI) has not remitted recoveries from asset sales.
• Finance Minister Nirmala Sitharaman announced last year that ₹14,131.6 crore had been recovered from Vijay Mallya’s case, including proceeds returned to public sector banks.
• In February 2024, Mallya’s lawyer claimed banks had recovered more than twice the borrowed amount in Kingfisher Airlines’ loan default case and sought a stay on further recoveries while demanding a detailed debt statement.
• SBI communicated that proceeds are still pending with Debt Recovery Tribunal offices in Chennai and Bengaluru, delaying settlement processes led by the liquidator.
• A total of 2,200 Kingfisher employees filed claims worth ₹3,000 crore; exact total dues remain unverified. ₹21.80 crore regarding Provident Fund dues has been released separately for workmen/employees to claim directly.
• Assets sold include four planes generating ₹38.57 crore under liquidation proceedings; ED attached high-value properties like Alibaug farmhouse (₹100+ cr), Kingfisher Villa in Goa (₹73 cr), coffee plantations in Coorg, and others under money laundering investigations.
• Kingfisher Airline ceased operations in October 2012 due to financial struggles; Vijay Mallya fled india in March 2016. United Breweries Holdings Ltd was ordered for winding up by courts between 2017-2020 to aid creditor recovery.

Indian opinion Analysis:

The delayed resolution of payments highlights bureaucratic challenges within India’s financial recovery infrastructure. despite substantial asset recoveries from Vijay Mallya’s case totaling over ₹14,000 crore-more than double the original debt-fund distribution remains stalled due to procedural bottlenecks at institutions like SBI and Debt Recovery Tribunals.

This complexity underscores inefficiencies within liquidation frameworks that affect priority creditors like employees waiting for compensation years after their livelihoods were disrupted. While some progress is evident through isolated fund releases (e.g., Provident Fund dues), broader systemic reforms may be essential to ensure swifter accountability when companies face insolvency crises affecting multiple stakeholders.The judicial aspect adds another layer following claims by Mallya’s lawyer about excess recoveries; ongoing legal disputes could prolong settlements further depending on rulings over surplus amounts owed versus recoverable sums adjudicated across courts or tribunals. Policymakers may need stronger mechanisms balancing debtor accountability with streamlined payout structures supportive of all stakeholders.

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