Saturday, December 14, 2013

How the credit facilities make you fall prey to the debt trap?

How credit facilities make you fall prey to the debt trap?
Ramalingam K GR: Saturday, December 14, 2013, 10:53 [IST


Life's little surprises always bank on credit facilities. Raj, a 35 year old executive built his dream house which he financed through credit. To meet his new lifestyle requirements, he went on a spending spree adding more electronics to his foray through his credit card. Little he did realize that his debt slowly was snowballing to a huge sum.
Be it your car's sudden overhaul, a mobile upgrade or an unexpected medical expense, credit is the immediate answer for many. But beware that these credit opportunities are just sugar coated debt traps.
How do you know you are slowly falling into the debt trap because of these credit facilities?
Well, there is no one answer to this tricky question. There are some signals which we need to lookout for and get back to track before things go awry. Read on to learn some of the signs of the debt trap.
Falling into the debt trap by exhausting the grace period:
What most of us don't realize that most of the lenders have grace period for making payments? While these additional days do make us feel great initially, the feel good factor doesn't last long. Taking advantage of the grace period can be dangerous. Use these days only for those little mistakes that happen in life. Routine deviation from the actual payment dates is the first sign of danger towards the debt trap.
Take a minute to check yourself. In the last 3 months how many times, you have used the grace period for paying your credit card bills, utility bills, insurance premiums and the like. In case if you miss the grace period also, then you may need to pay hefty amount as penalty or interest. This is how most of us fall into the debt trap unknowingly.
Falling into the debt trap by exercising the credit limit:
Credit cards allow you to spend money you don't currently have, and to repay what you've spent over time instead of all at once. At the offset, when we make small purchases it seems easy to pay them off. The real trouble of the debt trap begins when we start to pay only the minimum charges which barely cover the finance charges. Every small unpaid amount can accumulate over time and when the outstanding balance begins to march north, the ratio of the ‘credit used' to the ‘credit available' goes awry. Refrain from pushing your credit limits too far.
Falling into the debt trap by lagging in payments:
This is the most obvious time for you to ring the alarm and awaken yourself from being caught in the debt trap. What might seem to be acceptable exception for a delayed payment for once slowly turns into a practice, tending towards an insurmountable debt. Adding fuel to the fire is when we are levied late charges and penalties for paying only the minimum amount.
Understand how these signs lead you to the debt trap:
As your debt increases you will soon end up in a debt spiral, which affects your financial position gravely.
Exceed your budget - Paying through plastic money ruins your judgment on how much you are spending and results in overshooting your monthly anticipated outflow.
Worsen your woes - Unplanned and unwise rolling over of credit to meet immediate demands slowly gets you into the vicious circle and worsens your woes.
Unavailable funds in dire needs - Having a bad credit history negatively affects your credit score and impends your chances for a loan approval at the time when you genuinely cash strapped.
Understand the consequences you will face due to this debt trap:
Apart from a bad credit score, the debt trap will impact in the below areas.
Ruins your career - Bad credit is just the tip of the iceberg. Apart from being stressed to pay up your dues, it can tarnish your image in the society.
Affects family relations - It can estrange the relationship due to less available Income for family needs.
Draining the financial ability - Overdose and rolling over of credit may limit your repayment ability which may further result in legal battles and litigations.
Basically, it can lead to financial stress of two kinds - drains the relationship between you and your spouse, and in dollar terms, strains your financial ability. The total quality of your life goes havoc.
How can you overcome this habit and avoid the debt trap? 
"If you fail to plan, you are planning to fail." Benjamin Franklin. The key to any problem lies in planning. To ensure that the much sought after boon of today's time - credit, does not turn into a bane, you could try:
Expect the unexpected - Create an emergency reserve through an annual or periodic transfer from your income. It helps you meet your sudden car, home or medical expenses.
Accumulate a sum for anticipated annual expenses like school fees, higher education, and insurance. It improves your liquidity position in times of need.
Not biting more than what you can chew. Develop a Plan which monitors your spending activity. This helps you to be more aware of your personal finances and avoid lag in monthly payments.
Try to convert your outstanding dues into convenient equated monthly installments.
Bottom line:
Credit is a bouncing ball, the harder you throw, the faster it rebounds.
We cannot even imagine a life without a credit card nowadays. But it's never too late to take steps toward building healthy credit; it clears confusion, adds clarity to your financial planning and results in better financial life for years to come.
The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Director and Chief Financial Planner of Holistic investment Plannerswww.holisticinvestment.in a firm that offers Financial Planning and Wealth Management























]

I-T dept stakes primary claim over Kingfisher assets

FP  PTI  Dec 14, 2013


Bangalore: Asserting its primary claim, the Income Tax Department has maintained that dues to it will have to be settled first by Vijay Mallya-led Kingfisher Airlines, in the wake of a lender consortium of banks laying claim to "Kingfisher House" in Mumbai to recover part of their loans.
Kingfisher Airlines Limited had deducted tax at source from employee's salary and other payments for many years but failed to remit it to the government account following which it owes over Rs 350 crore as taxes, the Department said.
The IT Department had attached all assets of KAL and is in the process of recovering its dues by sale and attachment of assets and properties of the defaulter company, it said.
Kingfisher House, located near the domestic terminal of the Mumbai Airport, is under attachment under the second schedule of the IT Act, 1961, the department said in a statement.
The IT department's claim that the amount due to the government will have "priority" over other debts comes two days after the Karnataka High Court rejected KAL's plea challenging the move by a consortium of banks to take possession of its prime "Kingfisher House" property to realise part of the debts due to them from the airlines.
The court had said banks could take over the property as per law.
In its statement here, the IT Department said it is a settled proposition of law that the amount due to the government under any statue and, in this case, under the provisions of IT Act, 1961, will have priority over other debts.
As such, it said, the dues of IT Department will have to be settled first before the lender consortium of banks can stake any claim to the property.
KAL owes the amount to the Department on account of alleged TDS defaults committed many years ago and has been held as an assessee in default from the original date of its failure to remit tax. The airlines had deducted tax, hence the claim of the Department on the property also dates back to that period.
It cautioned that any person transacting in the "Kingfisher House" property will be held in violation of second schedule of Income-tax Act, 1961 and will be liable for all the consequences.
KAL has been grounded for more than 15 months and Mallya had stated in September that the airlines was in talks with a foreign investor for potential stake sale but refused to divulge the investor's name.

Auctioning Kingfisher House next week

Kingfisher Airlines. Reuters

by FP Staff Dec 13, 2013
Lenders to debt-ridden Kingfisher Airlines will take a call on auctioning the company’s headquarters, Kingfisher House, in Mumbai, next week.
The 14 banks, led by State Bank of India (SBI), which lent Rs 6,500 crore to the airline, have valued the property at little over Rs 90 crore.
On Wednesday, the Karnataka High Court rejected Kingfisher Airlines' plea to restrain bankers from taking over the Kingfisher House in Mumbai.
State Bank of India had initiated the procedure for taking over the Mumbai-based property earlier this year under the Sarfeasi Act. However, the United Breweries (UB) Group had sought intervention by the Karnataka High Court, questioning the consortium's move to take over Kingfisher properties, while filing a winding up petition against the company at the same time.
Meanwhile, last month, a Goa court directed the consortium to maintain status quo on an injunction on the Kingfisher villa in Goa after they made an attempt to take possession of the property. Bankers toldCNBC-TV18 that no further progress has been made in the case of the Goa property.
Kingfisher Airlines has been grounded for more than 15 months and Mallya had stated in September that the airlines was in talks with a foreign investor for potential stake sale but refused to divulge the investor's name.
Lenders have already  sold hundreds of crores worth of pledged shares of UB Group companies to recover their borrowings but are yet to recover nearly Rs 6203 crore from the airline, CNBC-TV18 reported.
Banks have also filed petitions to wind up UBHL and moved the Debt Recovery Tribunal against Kingfisher. Last month the Karnataka high court admitted a winding-up petition filed by BNP Paribas against UBHL.

List of Top 50 Corporate Loan Defaulters - Published by the All India Bank Employees Union (AIBEA)


All India Bank Employees Union (AIBEA) list of Top 50 Corporate Loan Defaulters
All India Bank Employees Union (AIBEA), one of 

the biggest employees unions in India has 

decided to publish the list of top 50 corporate 

defaulters in this country.Bank union, AIBEA, 

also demands that banks recover bad loans from 

these willful defaulters.

 BORROWER          LOAN NOT REPAID

1. Kingfisher Airlines Rs.2673 Crore
2. Winsome Diamond & Jewellery Co. Ltd.Rs. 2660 Crore
3. Electrotherm India Limited Rs.2211 Crore
4. Zoom Developers Private Limited Rs.1810 Crore
5. Sterling Bio Tech Limited Rs.1732 Crore


6. S. Kumars Nationwide Limited Rs.1692 Crore
7. Surya Vinayak Industries Ltd. Rs.1446 Crore
8. Corporate Ispat Alloys Limited Rs.1360 Crore
9. Forever Precious Jewellery & Diamonds Rs.1254 Crore
10. Sterling Oil Resources Ltd. Rs.1197 Crore


11. Varun Industries Limited Rs.1129 Crore
12. Orchid Chemicals & Pharmaceutical Ltd. Rs.938 Crore
13. Kemrock Industries & Exports Ltd.Rs. 929 Crore
14. Murli Industries & Exports Limited Rs.884 Crore
15. National Agricultural Co-Operative Rs.862 Crore


16. STCL Limited Rs.860 Crore
17. Surya Pharma Pvt. Ltd.Rs. 726 Crore
18. Zylog Systems (India) Limited Rs.715 Crore
19. Pixion Media Pvt. Limited 712 Crore
20. Deccan Chronicle Holdings Limited Rs. 700 Crore


21. K.S. Oil Resources Ltd. Rs.678 Crore
22. ICSA (India) Ltd. Rs.646
23. Indian Technomac Co. Ltd. Rs.629 Crore
24. Century Communication Limited Rs.624 Crore
25. Moser Baer India Ltd. & Group Companies Rs.581 Crore


26. PSL Limited Rs.577 Crore
27. ICSA India Limited Rs.545 Crore
28. Lanco Hoskote Highway Limited Rs.533 Crore
29. Housing Development & Infra Ltd. Rs.526 Crore
30. MBS Jewellers Pvt. Ltd. Rs.524 Crore


31. European Projects And Aviation Ltd. Rs.510 Crore
32. Leo Meridian Infra Projects Rs.488 Crore
33. Pearl Studios Pvt. Ltd. Rs.483 Crore
34. Educomp Infrastructure & School Man Rs.477 Crore
35. Jain Infraprojects Limited Rs.472 Crore


36. Kmp Expressway Limited Rs.461 Crore
37. Pradip Overseas Limited Rs.437 Crore
38. Rajat Pharma/ Rajat Group Rs.434 Crore
39. Bengal India Global Infrastructure Ltd. Rs.428 Crore
40. Sterling Sez & Infrastructure Pvt. Ltd. Rs.408 Crore


41. Shah Alloyes Ltd. Rs.408 Crore
42. Shiv Vani Oil And Gas Exploration Limited Rs.406 Crore
43. Andhra Pradesh Rajiv Swagruha Corp. Ltd. Rs.385 Crore
44. Progressive Constructions Ltd Rs.351 Crore
45. Delhi Airport Met Ex Ltd. Rs.346 Crore


46. Gwalior Jhansi Expressway LimitedRs. 346 Crore
47. Alps Industries Limited Rs.338 Crore
48. Sterling Port Limited Rs.334 Crore
49. Abhijeet Ferrotech Limited Rs. 333 Crore
50. Sujana Universal Industries Rs.330 Crore 

Total:                                       Rs.40,528 Crore

Friday, December 13, 2013

NPA Storm: Stress From Top 30 Defaulters

Play this video
December 12: Data released by the finance ministry reveals that the top 30 defaulters account for almost 50 to 60% of total gross NPAs in several banks. Bloomberg TV India’s Saloni Shukla shares a detailed report.

http://www.yourmoneysite.com/videos/watch/4425/npa-storm:-stress-from-top-30-defaulters


To check for potential NPAs, RBI orders audit of Allahabad Bank





F E Arun S | New Delhi | Updated: Dec 13 2013, 03:53 IST

Close on the heels of directing a forensic audit on United Bank of India, the RBI has initiated a special audit of another Kolkata-based lender, Allahabad Bank.

Close on the heels of directing a forensic audit on United Bank of India, the RBI has initiated a special audit of another Kolkata-based lender, Allahabad Bank.
The banking regulator has notified Allahabad Bank about the audit to assess the potential non-performing assets and ‘special mention accounts’, finance ministry sources told FE. The RBI’s focus on ‘special mention accounts’ of banks is part of its efforts to ensure that the lenders upgrade their Early Warning Systems so that timely action can be taken before more accounts slip into the NPA category, the sources added.
They said one of the objectives of the forensic audit being carried out on United Bank of India is to find out whether any criminal intent on the part of the bank officials had led to a rise in bad loans, and to present such evidence in a court of law.
The sources, however, added that the books of Allahabad Bank have not reached as precarious a stage as United Bank of India. The special audit at Allahabad Bank would be conducted by Ernst & Young, while Deloitte is carrying out the forensic audit on United Bank of India and is expected to submit its report by this month-end.
When contacted, Shubhalakshmi Panse, chairperson and managing director of Allahabad Bank, confirmed to FE that a thematic audit has been initiated by RBI and will be conducted by Ernst & Young. “I have been told they will look at the book of accounts and the credit portfolio,” she said.
Allahabad Bank’s net profit for the quarter ended September 30 rose to R276 crore from R234 crore in the same period last year. The bank’s gross NPA stood at 4.94% of gross advances in the July-September this year. In the corresponding quarter a year ago, the figure was 2.95%.
The introduction of a separate asset category of ‘special mention accounts’ and asking lenders to give their full attention to such accounts at the earliest stage to avoid bad loans is a practice followed by banking regulators in other countries — such as the US and Singapore — also.
However, the problem is that since the special mention accounts do not fall under the NPA category, they do not need provisioning and do not promptly come to the notice of RBI, the sources said, adding that the RBI now wants the banks to be equally careful about such accounts as well.
RBI governor Raghuram Rajan has made the resolution of distress assets a priority area as gross non-performing assets of 40 listed banks grew 37% year-on-year to R2.29 lakh crore at the end of September. Of the 40 lenders, 10 banks have gross bad loans above 5% of their total lending. Eight of these 10 banks are run by the government, including the State Bank of India, Punjab National Bank, UCO Bank and Central Bank of India.

Construction companies ponder debt recast


Delhi HC asks I-T to unfreeze Nokia's Chennai plant
















BS Reporter  |  New Delhi  
 Last Updated at 00:58 IST

Deal with Microsoft to go through, but tax case with Nokia continues


In an interim relief to Nokia and paving the way for its proposed deal with Microsoft, the Delhi High Court on Thursday directed the income-tax department to lift a freeze on the Finnish mobile firm’s Chennai plant.

The tax dispute between the government and Nokia, however, will continue separately.

The court has asked Nokia to deposit Rs 2,250 crore in an escrow account. If Nokia loses, the tax liability could be as high as Rs 21,153 crore, including interest and penalty. This means the tax liability will not be shifted to Microsoft after the deal, as had happened in the case of Vodafone in 2007.

M Saravanakumar, president of Nokia India Thozhilar Sangam, which claims to have the support of 4,800 employees, said: “We have not got a copy of the order. But we have heard the deal will happen. We are happy.”
WEAK SIGNALS
Nokia tax case so far
  • Jan 2013: I-T dept asks Nokia India to clarify on non-payment of TDS on software supplies and change in accounting model. Chennai offices, factory raided
  • Feb 2013: Nokia says I-T raided its facility without giving a reason
  • Mar 2013: Nokia moves the Delhi High Court
  • Apr 2013: Nokia gets an interim stay, withdraws application later; HC asks firm to file an appeal with I-T commissioner
  • Jun 2013: The I-T commissioner dismisses Nokia’s plea against the Rs 2,100-crore tax claim; Finland starts dialogue for settlement under DTAA to resolve the issue
  • Sep 2013: HC puts an interim stay on transfer of ownership rights by Nokia India
  • Nov 2013: Nokia moves Delhi HC again; seeks lifting of the stay order
  • Dec 2013: HC accepts appeal, allows transfer of assets (Chennai unit) as part of sale of handset business to Microsoft; tax dispute continues

Nokia has also been asked to give a letter of guarantee that it will comply with the court’s order. If the company defaults in future tax payments, the department can approach the court again.

Nokia Corporation Finland and Nokia India will jointly be responsible for payment of income tax. Besides, Nokia and the tax department are free to reach a mutual agreement on the tax dispute.

“Nokia acknowledges the decision by the Delhi High Court to release its Indian assets, including its Chennai facility, for the planned transfer to Microsoft. Our understanding is that the decision allows for the transfer of the assets. However, Nokia has been asked to meet a number of conditions in the ruling and still needs to provide the authorities with additional documentation. We expect these conditions to be in line with international treaties and practices,” Nokia India said in a statement. It added: “Nokia continues to expect the transaction with Microsoft to close in the first quarter of 2014.”

BMR Legal Partner Mukesh Butani said: “The question before the high court was the quantum of its anticipated demand from Nokia by way of guarantee to protect the tax administration’s interest. As I understand, in its pleadings before the court, Nokia had offered the initial amount of Rs 2,250 crore as a security. I wonder what was the tax administration’s wisdom to seek sums in multiples of the amount by adding penalties and double disallowance. In my view, by doing so, the administration has lost an opportunity to build goodwill with an ambassador of India and an early investor.”

“Core tax dispute in relation to classification of payment as royalties and consequent tax-withholding obligation is pending for resolution. However, providing a critical relief, the Delhi High Court has ordered unfreezing of the assets at Chennai plant, permitting the sale to Microsoft to go through. To protect the interest of revenue, the court has imposed certain conditions on the taxpayer and prescribed safeguard measures,” said Sunil Jain, partner, J Sagar Associates.

“The order is fair and balanced and brings relief to Nokia India, and to Nokia in general. The issue of Nokia’s taxability is a contentious one — not only pending before the appropriate authority for consideration but also is the subject matter of mutual agreement procedure between the competent authorities of India and Finland,” said Daksha Baxi, executive director, Khaitan & Co.

Nokia had agreed to sell its mobile phone business to the US-based IT company, Microsoft, in a ^5.4-billion ($7.2-billion) deal in September. However, the deal had hit a hurdle as the Chennai manufacturing facility, one of Nokia’s biggest phone-making factories, was seized by the I-T department.

The high court verdict has come at an appropriate time for Nokia, as the deadline for inclusion of the plant under its deal with Microsoft was December 12. If this deadline was missed, the plant would have been kept out of the deal. The Chennai facility employs 30,000 people in India, directly and indirectly.

In March 2013, tax authorities had served a notice to Nokia, demanding Rs 2,080 crore in taxes for wrongfully claiming exemption on royalty payments made against supply of software by the company’s parent firm for five years starting 2006-07.

The I-T department claimed Nokia was downloading software from its parent company in Finland to manufacture mobile devices. According to the I-T Act, royalty paid on downloaded software attracts TDS (tax deducted at source) at the rate of 10 per cent. However, tax authorities alleged these transactions were shown in the audit report under procurement of ‘raw materials’ to evade taxes. After search-and-seizure operations in January, the department had frozen assets at the Chennai facility.

Nokia offered to pay Rs 2,250 crore to settle the case but the proposal was rejected by the department. Earlier this week, Finnish finance ministry officials had met their Indian counterparts on the issue. The meeting, which also reviewed the double-taxation avoidance agreement between the two countries, remained inconclusive.


What Nokia says

“Nokia acknowledges the decision by the Delhi High Court today to release Nokia’s Indian assets, including its Chennai facility, for the planned transfer to Microsoft," said Poonam Kaul, Director-Communications, Nokia IMEA..

She added, "Our current understanding is that this decision allows for the transfer of the assets. However, Nokia has been asked to meet a number of conditions in the ruling, and still needs to provide the authorities with additional documentation. Nokia expects these conditions to be in line with international treaties and practices."

The company will now start to prepare for the planned transfer of the assets, but notes that there are still a number of statutory clearances that remain before the assets can transfer. Nokia repeats its call for the Indian government to work with urgency to facilitate the other approvals needed for the transfer and secure employment for the tens of thousands of employees involved, she said.

Nokia continues to expect the transaction with Microsoft to close in the first quarter of 2014.


Defaulters may have to pay higher rates, warns RBI




















Press Trust of India  |  New Delhi  
 Last Updated at 17:47 IST


RBI Governor said the central bank will come out with a discussion paper next week with regard to distressed borrowers and rising 
NPAs

Concerned over rising bad loans, the Reserve Bank today said it could consider making future borrowings more expensive for willful defaulters.
Speaking at the Delhi Economic Conclave here, Reserve Bank of India (RBI) Governor Raghuram Rajan said the central bank will come out with a discussion paper next week with regard to distressed borrowers and rising NPAs.
"For willful defaulters or a new category that we call uncooperative defaulter, future borrowing will become more expensive. By uncooperative defaulter I mean those who don't work with their lenders to achieve equitable and efficient resolution of stressed assets," he said.
Rajan said there was a need to ensure that the system recognises financial distress and provide for fair recovery of loans in the interest of lenders and investors.
"Next week, we propose to put out a discussion paper... The key element (will be) to deal with distressed borrower... It will focus on recognition, resolution and recovery (of assets)," he said.
Rajan said inability to deal with the problem of distressed assets will have a bearing on growth prospects.
To improve the health of the financial sector and to improve asset quality of banks, besides preventing slippages, RBI from time to time issues instructions to banks.
As per the norms, each bank is required to have a mechanism for early detection of signs of distress, including having a loan recovery policy, which sets down the manner of recovery, and monitoring of of write-off.
The ratio of top 30 NPAs as a percentage of gross NPAs, in respect of public sector banks, as on September 2013 is 35.5 per cent and for all banks it is 38.8 per cent.
The gross non-performing assets (NPA) amount of top 30 accounts of PSBs stood at Rs 72,174 crore, while for all banks it was Rs 91,667 crore at the end of September, 2013. 

Jayalalithaa assets case: court orders shifting of valuables to Bangalore

Jayalalithaa

The Hindu :Dec 13,2013

They include around 800 kg silver and 28 kg gold


A Special Court trying the disproportionate assets case against Tamil Nadu Chief Minister Jayalalithaa on Thursday ordered for shifting to Bangalore all the valuables and other materials seized from the accused persons in connection with the case.

Special Court judge John Michael Cunha passed the order while allowing a plea filed by DMK leader K. Anbazhagan seeking a direction to postpone the proceedings of the case till all the seized materials are transferred to Bangalore from Chennai, where it has been deposited in Reserve Bank of India’s treasury.

The Special Court refused to accept the contention of the accused that there was no need to shift the valuables as according to the law the valuables are in the custody of the Special Court in Bangalore following transfer of the case to Bangalore from Chennai in 2003, even though physically they are in the custody of the Special Court in Chennai.

“If the arguments of the learned counsel for the accused is accepted, it would lead to a precarious situation in case discrepancy is noted in the weight, description and identity of the material objects or in case any loss or missing of the articles is reported, responsibility may have to be assumed by the Presiding Officer of the Special Court at Bangalore though the charge of the properties is not transferred to him, merely because the Special Court at Chennai has ceased of jurisdiction over the matter,” the judge stated.

The Court said “…if the court proceeds to dispose of the case without physically securing the properties, it is likely to give rise to an impression that the essential evidence produced before the court has not been looked into by the Court…therefore there can be no two opinions that the material objects marked in the case are absolutely necessary for fair decision in the case.”
The Court adjourned further proceedings till December 21, or till the shifting of the valuables.

Restriction on media

The Court said that for security reasons, the jurisdictional station house officer and investigating officers should ensure that the date and the process of handing over and transit of the valuables to Bangalore shall not be telecast or publicised by electronic and print media or by any persons in whatsoever manner. On bringing the valuables to Bangalore they would be deposited at Safe Vault of Stamp Depot, Vidhana Soudha, or safe custody of the RBI.



Valuables include around 800 kg silver, 28 kg gold, 750 pairs of shoes, 10,500 saris, 91 watches and several other items that were seized during the raid conducted by the Directorate of Vigilance and Anti-corruption (DVAC), Chennai.
 

Lenders may put Kingfisher property in Mumbai on the block



Vijaymallya.jpg


M C Dec 13, 2013, 01.00 PM IST


This comes a day after the Karnataka High Court rejected a plea by the company restraining its bankers from taking possession of the prime property, whose sale could fetch about Rs 90 crore.
Kritika Saxena, Reporter ,CNBC-TV18

Source: CNBC-TV18

According to sources, lenders of debt-laden aviation firm Kingfisher Airlines are considering whether to proceed with the auction of Kingfisher House in Mumbai, reports CNBC-TV18’s Kritika Saxena.

This comes a day after the Karnataka High Court rejected a plea by the company restraining bankers from taking possession of the prime property, whose sale could fetch about Rs 90 crore.

State-run lender State Bank of India , which is the lead banker in the consortium of Kingfisher lenders, recently initiated a procedure to take over the KFA House, under the Sarfaesi Act, which facilities recoveries for loans gone bad.


Kingfisher has been in the news since last year for its troubles over a whopping Rs 7,000-crore debt burden. Failure to make payments over its dues led to the government cancelling its aviation license.

The fate of the airline has taken a toll on the fortunes of other firms in the UB Group stable, with chairman Vijay Mallya having to resort to stake sales in firms such as United Breweries and United Spirts .

There is no progress on the possession of KFA Villa in Goa after the Goa court recently directed the lenders’ consortium to “maintain status quo”, in effect disallowing any sale for now.

Kingfisher Air stock price
On December 13, 2013, at 15:32 hrs Kingfisher Airlines was quoting at Rs 4.25, down Rs 0.04, or 0.93 percent. The 52-week high of the share was Rs 18.09 and the 52-week low was Rs 3.17.

The latest book value of the company is Rs -166.59 per share. At current value, the price-to-book value of the company was -0.03.