Kingfisher Airlines'' brand valuation being investigated

New Delhi, March 16

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Kingfisher Airlines, liquor baron Vijay Mallya’s now grounded carrier, is currently being investigated for suspected overstating of the brand’s valuation.

Serious Fraud Investigation Office (SFIO), central government’s law enforcement arm that investigates serious financial crimes, is now investigating if the value of more than Rs 4,000 crore of the brand has been overstated to get more money from banks and illegally use the additional sums for other investments, sources said.

The agency is also investigating Grant Thornton Limited Liability Partnership, which had valued the brand.

"We fully stand by our brand valuation report that we believe was appropriate in the context of when it was done and the purpose for which it was done. Grant Thornton will obviously be pleased to offer all the information we have in connection with the matter to the appropriate authorities, and support any investigations," Grant Thornton said in reply to a query sent to it.

SFIO is among those already investigating suspected financial misdealings. 

The airline finally buckled under mounting debts and bankruptcy to fold up its operations in October 2012, leaving banks — some 17 of them — struggling to get back more than Rs 9,000 crore that Mallya and the airline owed them in loans.

Mallya — once dubbed ‘King of Good Times’ — meanwhile left the country on March 11.

The businessman’s supposed flight has caused uproar in the country. The Opposition criticises the central government of aiding his “escape”, while the latter retorts with blaming principal opposition Congress of having encouraged Mallya’s financial misdeeds.

Several agencies are currently investigating Mallya and the company: besides SFIO, the Enforcement Directorate (ED) — another agency that investigates financial crimes — and the Central Bureau of Investigation (CBI) are investigating the loan default while Securities and Exchange Board of India (SEBI) is inquiring into allegations of insider trading and violations to listing regulations and corporate governance norms, among other lapses.

The ED recently booked Mallya and some others for corruption based on a case the CBI had instituted against Mallya, Director of Kingfisher Airlines, the company, former CFO A Raghunathan and unknown officials of the IDBI Bank in 2015. The agency is also investigating Kingfisher Airlines’ financial structure deeply to trace possible bribes offered by the company. — Agencies