Of the 66 planes that Kingfisher once operated at the peak of its business during 2011, making it the country’s third largest in terms of fleet size, 34 were taken back by leasing companies for defaulting on payment during the first half of 2012 and about a dozen remained grounded for lack of spares and maintenance. It is believed they were heavily cannibalized and became inoperative needing expensive repairs.

What is surprising is that despite such state of affairs , neither the aviation regulator Directorate General of Civil Aviation (DGCA), nor the consortium of 17 banks that lent over Rs 9000 crores raised issues of non- payments and defaults in any significant manner. The DGCA, in particular, was informed of non-payment of staff salary and non-adherence to various aviation norms related to safety and operations. But it chose to ignore.

This raises the question of power and clout Vijay Mallya, the then reining prince of India’s skies, wielded. Powerful ministers and bureaucrats, including those directly in charge of aviation industry, were reportedly wary of questioning Mallya. Cutting across political divide, politicians of all hues could be seen befriending him. On his part, Mallya was effusive distributing favours like offering free rides and hospitality to various destinations. Being a member of Parliament himself, he had unfettered access to ministers.

If politicians were making hey, how could the bureaucrats lag behind? This explains why Mallya could fly out of India just a day before a case was made out in the judiciary for impounding his passport. It is now being openly said that Mallya met senior government functionaries, including ministers, a day before he departed for London with seven suitcases in tow.

The obvious question that begs for an answer is: who are these government functionaries whom Mallya met a day before his departure and what transpired between them. A casual remark that there was no case against Mallya to warrant invalidating/ impounding his passport on the day he departed, makes a mockery of the Government’s much touted tough stance on erring businessmen. To say the least, days before Mallya left the country undetected, media was full of reports raising issues on the businessman’s Rs 9000 crore loan default.

Apart from the fact that Mallya was a chosen favourite for a massive unsecured loan now amounting to Rs 9000 crore, thanks to his clout, what should strike now in the government is an equally massive systemic failure. If Mallya was going about spending money with impunity – he placed huge orders with Airbus Industries for expensive aircraft — what was the regulator doing? Not to talk of the banks, even the DGCA and the civil aviation ministry did not raise any issue on the proposed expansion of the airline while defaulting on loan repayment. Even non-payment of salary to employees for months did not bother the government.

While all this and much more may be a subject matter of detailed investigation, what is interesting is that a muted but public spat is taking place between the ruling NDA and the opposition Congress on who helped Mallya. The ruling party’s obvious charge is that it was the UPA regime which liberally gave loans to him. Why did the then regime not do the reality check before giving go ahead? What was the RBI and the banking department of the finance ministry doing ? Was there a quid pro quo? These are the issues being raised both in government and party levels.

To counter this charge, the Opposition Congress and others want to know why no action was taken by the incumbent government once it was known that Mallya had turned a big time defaulter? Why was Mallya allowed to leave the country when it was known that he could flee to escape law? Is it not the failure of the incumbent government? Who in the present regime are shielding him?

While all this is leading to washing dirty linen in public, the ultimate casualty may be the aviation industry which is heavily capital intensive and needs massive funds for doing business. Bankers and lenders will now be overcautious in helping airlines industry. (IPA Service)