Ruby Arun

Saturday, 21 January 2012

SCAM IN SKY; Nexus between Vijay Mallya and Politicians....BY RUBY ARUN

SCAM IN SKY; Nexus between Vijay Mallya and Politicians

This is Indian democracy. In every 30 minutes a farmer suicides but the government is all occupied in dealing with altogether a different crisis. Apparently, India’s second largest airlines, Kingfisher, is suffering a financial crisis. Its shares are at an all-time low. The airline is owned by Vijay Mallya, whose love for opulence is no secret. The same Mallya who has, for years made young Indian girls go semi-nude to appear on the calendars of KingfisherWhy should a private airlines with apparently no impact on Indian economy be saved by Government’s intervention, is perhaps not so obvious, but a glance at facts, will expose the ugly nexus between the Ministers and Corporates to benefit each other and rob the national resources in turn. Interestingly, Vijay Mallya is supported by the government and opposition parties too.  Few prominent personalities are  Rajiv Shukla of Congress, Murli deora, Milind Deora, Jitin Prasad, Vyalar Ravi, SM Krishna, Sharad Pawar of NCP, Praful Patel, BJP president  Nitin Gadkari, Sushma Swaraj, Arun Jaitley and  Ram Jethmalani. Moreover, these people have gone beyond the ambit of their parties to help Vijay Mallya.
Obtrusively, never has the flamboyant Vijay Mallya been in such a tight corner before. Kingfisher Airlines was set up in 2003 but hasn’t seen a single year of profit since it got listed in 2006. Today, accumulated losses stand at about Rs 8,200 crore and the money to pay for fuel, salaries and airport fees is running out, prompting Mallya to approach the government for a bailout. However, market analysts believe flaws in Mallya’s business plans and style of functioning lie at the root of Kingfisher airlines woes.
In a controversial report on the airline, Veritas Investment Research analysts point out that Mallya should have never got into the airline business. The ill-conceived foray into the airline business has already cost UB shareholders dearly, and that their ownership of India’s premier liquor and beer assets has been sacrificed at the altar of egoistic ambitions. The problem, of course, lay in acquisitive excess. For Mallya, there was no ducking the temptation of getting into the airline sector. For one, there was the glamour, something he couldn’t get enough of despite the yachts and islands. In time, the airline became a stepping stone for the pursuit of other adventures. He acquired Whyte & Mackay, a Scottish bulk liquor maker amidst drama and glamour, holding a press conference in London to announce the deal. He bought newspapers, fashion and movie magazines, bought and sold a TV company and added football teams to his ever expanding empire. He even added a cricket team to his list of acquisitions and called it Royal Challengers. Someone who was known for his distaste for politicians, he actually funded a party and became a Rajya Sabha MP as well.
The acquisitions wouldn’t just stop there. He went on to own a racing team (Force India) which regularly competes in Formula One racing events, launched a calendar named after his brand, Kingfisher, in which the best of the models fell over each other to feature. He held New Year parties at his famed Goan palatial bungalow.
Of course, the biggest venture of them all was Kingfisher Airlines and because he was the big daddy of the glamour world, he promised flyers a class of service not usually seen among the domestic airlines. Jet Airways was good and on time, but was for busy executives; Air Deccan was for the aam aadmi, a sort of shuttle service, while the others either didn’t matter or were too small.
It was when the good times seemed to last forever that Mallya made his first strategic mistake. Deccan Aviation’s Capt G.R. Gopinath, who was desperately looking for a buyer for his airline, Air Deccan, had all but tied up with the Anil Ambani for a sell-out. Some last-minute delays eventually led to the collapse of the deal. That’s when Mallya, who kept denying that he couldn’t even think of buying an airline whose business model was different than his own, suddenly put in his bid, apparently offering more money than the previous one to clinch the deal.
It seemed a good deal in the beginning. Mallya got Air Deccan’s huge market share and several aircraft as well, plus an immediate listing. Thrown in was another goody: the licence to fly on international routes as Air Deccan had been in the business for five years — a requirement by the regulator for any airline to fly overseas. But he also acquired the losses incurred by the airline.
Through a reverse merger, Kingfisher Airlines became Air Deccan and once the entire acquisition was completed with necessary approvals from the regulator SEBI in place, Mallya quickly changed the airline’s name back to Kingfisher Airlines in 2008.
He spun off Air Deccan’s fleet into a subsidiary called Kingfisher Red. So, Kingfisher Airlines had an economy as well as business class and flew on trunk routes including the metros, while Red did the rounds of tier-II cities’ as well as some of the bigger cities. Mallya was not just into one business but several and each as different as the other.
While the liquor and the beer businesses had an experienced set of officials running the show, the others needed the undivided attention of Mallya himself. This was where his second mistake came in. The airline had everything going for itself: great brand visibility, loyal customers and a wide network. But as a former business partner of Mallya pointed out recently, he was more like an absentee landlord.
There is one more name which unfolds another episode for us. Satish Ohri, is a journalist and owner of a magazine known as Business at Zero hour. Neera Radia mentioned name of Satish Ohri during the investigation of 2G spectrum scam by alleging him of being apprised of scam in its initial phase. He entered power gallery with help of two journalists.
Surprisingly, even the opposition is flowing through the tide. Vyalar Ravi and Pranab Mukherjee have consulted each other to bail out Kingfisher from the crisis. Murli Deora and Central Minister Jitin Prasad under the direction of Prime Minister have been going through rounds of meeting with all national banks.
Sharad Pawar who is representative of Maharashtra has become an active partner in Mallya’s  business. Sharad Pawar has 16 per cent share in Vijay Malya’s IPL. Rajiv Shukla, Praful Patel and Murli Deora are his likes.
According to CAG, when Praful Patel was civil aviation minister, the then Air India Limited did agreement for buying and selling of 50 planes with Boing and General Electrics.
 According to CAG, 111 planes were acquired by Air India through debt of in Rupees 38,423 crore that ultimately proved to be a disaster recipe. This was all done under pressure of Ministry. 
On the other hand Patel gave a good deal to Mallya as with the help of Praful Patel he purchased 21 planes of Air Deccan which was cheap at that time and  he  landed on runway by name of kingfisher Red. That time also the fare of fuel and airport surcharge was above 3000crore. But Patel was minister and nobody had gut to raise finger on Mallya.
 Mallya is also famous for making his presence felt through friendship in political corridors. He has connections fashion designer Reena Dhaka, Neha Dhupia, actress Shilpa Shety, Sameera Reddy, B grade heroine Payal Rohtagi, Claudia Sessal, Dimple Kapadia, MTV VJ Sophie Chaudhary and several other well -known personalities like Nita Ambani. Central Minister Murli deora is considered as the pawn of Mukesh Ambani
A powerful minister of Manmohan Singh government says in anger that this is an era of free economy. Then, why is the government so eager to provide bail-out package to a private company?  Moreover Vijay Mallya is not a poor man. He is known for his extravaganze and lavish business umpire.                                    

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