In a significant development for former employees of the defunct Kingfisher Airlines, the Enforcement Directorate (ED) has facilitated the restitution of ₹312 crore towards their long-pending dues. This action comes a day after photos of the airline's fugitive founder, Vijay Mallya, celebrating his pre-birthday in London surfaced online.
Path to Restitution: From Attached Assets to Employee Payout
The recovered amount has been officially transferred to the court-appointed liquidator, who will now oversee its disbursement to the former workmen. This crucial step was made possible after the Debt Recovery Tribunal (DRT) in Chennai approved the restitution plan. The funds originate from the sale of shares that were previously attached and restituted by the ED to the State Bank of India (SBI).
The case traces back to when Vijay Mallya fled to the United Kingdom after the Central Bureau of Investigation (CBI) registered a loan fraud case against him. Subsequently, the ED initiated a money laundering probe against Mallya and Kingfisher Airlines Ltd (KAL). His legal status was cemented in January 2019 when he was declared a fugitive economic offender.
Massive Asset Attachment and Recovery
Over the course of its investigation, the ED identified and attached assets belonging to Vijay Mallya, Kingfisher Airlines, and linked entities. The total value of properties attached under the Prevention of Money Laundering Act (PMLA) stood at a staggering ₹5,042 crore. In a separate action, additional properties worth ₹1,695 crore were also attached.
Later, a special PMLA court granted permission for the restitution of all these attached properties. The process was to be managed through the DRT for the benefit of the SBI-led consortium of banks. The ED successfully restituted these assets to the consortium banks. Upon their eventual sale, these assets fetched a combined value of approximately ₹14,132 crore.
Prioritizing Employee Dues Over Bank Claims
A senior official explained the recent move to settle employee dues. "ED coordinated with all stakeholders to ensure settlement of long-pending workmen dues and engaged with senior officials of SBI and facilitated utilisation of restituted assets for payment of employee claims," the official stated.
The mechanism involved the State Bank of India approaching the DRT by filing an interlocutory application. In this application, SBI offered the restituted assets specifically for the discharge of workmen dues. Critically, the bank consented to giving priority to these employee claims over the claims of secured creditors, showcasing a notable decision to address human hardship.
This restitution marks a pivotal moment for the former employees who have waited years for their rightful dues, even as the main accused, Vijay Mallya, remains abroad. The action underscores the enforcement agency's role in not just attaching assets but also ensuring their channelization to settle legitimate dues, including those of the workforce affected by the corporate downfall.
