UBHL tells HC it won’t contest prosecution of subsidiary /promoters for failure to clear debts

Bengaluru: Liquor baron Vijay Mallya-linked UBHL on Thursday, December 20 urged the Karnataka High Court not to allow winding up of the company, saying it would not contest prosecution of its subsidiary company or promoters, who have failed to clear debts related to defunct Kingfisher Airlines Limited.

“There are several independent companies under UBHL, which is a flagship company. One of the subsidiary companies or promoters has committed the wrongdoings, not UBHL. Let government agencies investigate. We do not want to contest prosecution against our subsidiary company or promoters,” UBHL counsel Sajjan Poovayya said.

The Karnataka High Court is hearing a plea filed by UBHL, pleading that Mallya-linked UBHL should not be wound up. The company has also sought an opportunity to clear the debts related to Kingfisher Airlines Limited.

The bankers and creditors have been pressing for closure of the company to clear the debts owed by Mallya, wanted for alleged bank fraud and money laundering amounting to an estimated Rs 9,000 crore. Making submissions before the division bench, comprising justices Narayanaswamy and B P Bhajantri, Poovayya said winding up the company would be disadvantageous to banks and creditors as they would recover less than the actual debt.

“If UBHL is wound up, banks and creditors will merely recover Rs 7,500 crore after selling assets and shares that are attached to various Indian courts, the Debts Recovery Tribunal and the Enforcement Directorate,” he submitted.

“If the company is not wound up, banks and creditors will recover more than Rs 7,500 crore, which could add up to Rs 12,000 crore. Hence I submit before the court that the company should not be allowed to wind up,” Poovayya said.

Poovayya said the additional money would be raised by UBHL-linked companies which have agreed to make contributions to repay the debts.

He placed before the court the copies of resolutions passed by UBHL-linked companies, which agreed to make contributions to repay debts.

Poovayya also submitted that the banks and creditors have the right to sell KAL’s assets and shares, though they have been confiscated by the three government agencies.

“Even the PMLA Appellate Tribunal had also said the same in one of the hearings,” he added.

Poovayya also submitted that the value of its independent companies will deflate if the flagship company UBHL is wound up.

The bench then posted the case to January 3 for further hearing.