5/9/2016

Mallyabecamethebanker'smostvaluedtrophyRediff.com

Printthisarticle

Mallyabecamethebanker'smostvaluedtrophy
March12,201612:39IST

'LendingtoMrMallyawasthebankers'seasontickettocorridorsofpowerandglamour.'
'BorrowingfromthemwaslikeafavourMallyadidtothem,'saysShekharGupta.

IMAGE:TheKingofGoodTimesalightsfromhisRollsRoyceattheMahalaxmiracecourseinMumbai,2013.

n February 7, 2010, at the peak of the modern makeover of State Bank of India, its aggressive chairman O P Bhatt
(20062011)wasdoingashowandtellatthelaunchofhisnewtechnologyplatform.UnlikemostPSUcaptains,MrBhatt
lovedambitionandscale.Hewasgoingtomakehistechlaunchintotheyear'sbiggestcorporateparty.
HehiredMumbai'sBrabourneStadium,invitedeverybignameinbusinessandtheyallturnedup,includingthenfinance
minister Pranab Mukherjee. Mr Bhatt had personally called each of his guests (this writer included). He started the
presentationwithlasers.Alllightsinthestadiumwereturnedoffashisguestswatched,spreadoverscoresofroundtables,
andapplauded.Thenadistractingbuzzcamefromtheleft.
Inthereflectedlaserglowyoucouldseeaboutadozenveryimportantlookingsilhouettes.ItwasVijayMallyamakinga
typicallygrandentryashewouldintoahome,aparty,anywhere,withhisflunkeys,factotums,retainers,bodyguards,one
ofthemevencarryinghistwomobilephonesonasilvertray.Hisboyswereallmuscular,tall,indarksuits(mostlytheVVIP
securitysafaritypesifIremembercorrectly)andglowedinhispower.
TheircollectiveaurawasenoughtoforceMrBhatttohalthispresentationandaskforthelightstobeswitchedon.And,as
everybodyrealisedwhoitwasthatstoppedtheshow,therewerewhispers.Mostlyofenvyandadmiration."Boss,whatever
youmaysay,youshouldbeaborrowerlikeVJM,"saidabusinessleaderonmytable."Hehasthepowertodisrupthis
biggestlender'spartyandyetbetreatedwithizzat."
SuchwasMrMallya'spower.

emember,in2010hewasalreadysteepedinlossesanddebt.Rememberalsothat2010wasstilltheeraofpost2008
stimuluspackageswhenrateswerelowandliquidityplentiful.Itwasalsowhenoilpriceswererising,butnothingwould
containhisambition.IdonotbelieveanyofhislenderPSUbankswouldhavehadthecheektocautionhim.
http://www.rediff.com/business/report/mallyabecamethebankersmostvaluedtrophy/20160312.htm?print=true

1/3

5/9/2016

Mallyabecamethebanker'smostvaluedtrophyRediff.com

They were thrilled to be invited to his parties, and honoured when he came to theirs. Mr Mallya achieved something no
Indianbusinessmanhadsofar:Hebecame,evenasarepeatborrower,thebanker'smostvaluedtrophy.Evenwhenhehad
prospectivedefaulterwrittenalloverhisbalancesheets.
Thisisn'taninsightintothelifeandtimesof'Dr'(honoriscausa)VijayMallya.Idonothavetheskillstounravelhisbusiness
dealings,mergersanddemergers.Nor,Isuspect,didourfawningbanks,whichislessdefensible.Hiscreativitywasnever
tobedoubted.
Atthepeakofthegogoyearsin20072008,forexample,whenheboughtoverthedudAirDeccanatanenterprisevalueof
Rs2,100crore(Rs21billion),itwasDeccanthat'merged'Kingfisherintoit.
Everybodyknewwhy.Hewasbypassingthecivilaviationministry'strulyidioticrule(whichpersists)thattoflyabroadan
airlineshouldhavebeeninoperationforfiveyears.
Kingfisherhadonlystartedin2005andMallyawasinahurry.SoheboughtDeccanbutmergedhisairlineinit,toclaim
overseasflyingrights.
Verycreative,you'dsay,andapplaudbothhischeek,andsenseofhumourinshowingupthebureaucracyforitsregulatory
incompetence.Butwouldyoulendhimmoneyforthis?

ut yourself, however, in the shoes of the bankers, particularly the public sector ones. Mr Mallya wasn't just an
entrepreneur,butaprominentmemberofParliamentonfirstnametermswithmostoftheCabinetmembersthroughAtal
BihariVajpayee'sNDAandManmohanSingh'sUPA.
As a secondterm MP, he was a member of the key consultative committees including, no surprises, civil aviation and
fertilisers(Mallya'sUBGroupalsoownedMangaloreChemicals&Fertilisers).
IfIndianParliamentissounmindfulofconflictofinterest,whyblamepoorbankersforbeingstarryeyed?
Theyviedtobeinvitedtohispartiesandevents,includingIPLmatches,whereherubbedshoulderswiththesexiest,the
most powerful and famous in the country, from film stars and models to politicians and civil servants and indeed, top
journalistsandmediabarons.

endingtoMrMallyawasthebankers'seasontickettocorridorsofpowerandglamour.Borrowingfromthemwaslikea
favourMallyadidtothem.
This,wheneverydiagnostictoldyouIndianaviationwasnosediving.Infairness,wealsomustnotethatthiswasexactlythe
periodofcompetitive,hyperendocrinologicalblunderingincorporateIndia.
JetAirwaystoo,inthekamikazefightformarketshare,acquiredSahara,adudofDeccandimensions,alsoforRs2,000
crore(Rs20billion)onborrowedmoney.ThiscompetitivestupiditynearlykilledIndianaviation.
Kingfisherchokedonitsacquisition.Jethadaneardeathexperience.Butitspromoterhadoneattributeinsuchcontrast
withMrMallya:Endless,ifexaggeratedhumility,andabilitytosay,'Iscrewedup.'Withoutthese,youshouldnevertakeother
people'smoney,asdebtorequity.

heMallyastoryismoreaboutoureasyembraceofcronyism.

Parliament,politics,thebureaucracy,themedia,thebankswereallcomplicitnotjustintheriseandfallofVijayMallyabutof
manyothers.
Inthenameofsocialistprotectionismwehavebuiltagiant,permanentnexusofthepowerfulwherecontactsandnetworks
mattermorethanbalancesheets.
Mostofourtraditionalbusinessmen,therefore,havepocketsdeepenoughforourpuny'sarkar'tofitinquitesmugly.Someof
thatischangingnow,andwhetherMrMallyalikesitornot,themediaiscontributingtothisvirtuouschange.
Bytheway,amongthebusinessesheacquiredandbankruptedwasalsoanewsmediacompany.Formoredetailsplease
askmyfriend,MJAkbar.
BankdistressisnotnewtopostreformIndia.Thelastsuchcrisiscamein20022003andTheIndianExpress,whichIthen
edited,startedaninvestigativeseriesanchoredbySamarHalarnkarandcalled'TheGreatIndianBankRobbery.'Checkout
thearchives.Manyofthenamesthatfeaturedinthat30pluspartseriesarealsointoday's'halloffame.'

iketheKhansofBollywood,ourstressedborrowersarealsoevergreen,andliketheirfans,thebankersequallystarry
eyed. That series was causing the National Democratic Alliance government discomfiture. A few messages came from
'higherups'complainingwewereoverdoingit.
Then,oneafternoon,thebigmancalledhimself."Arrey,kitneydinchalayengeisserieskoaap,pooravarsh?(Forhowlong
http://www.rediff.com/business/report/mallyabecamethebankersmostvaluedtrophy/20160312.htm?print=true

2/3

5/9/2016

Mallyabecamethebanker'smostvaluedtrophyRediff.com

willyourunthisseries,awholeyear),"heasked.
Isaid,"No,Atalji.MinimumqualificationtomakeittothelististhatyoushouldbedefaultingonmorethanRs500crore(Rs5
billion),somaybeafewmore."
"ThenwhyhaveyouputBaalujithere?HisdefaultisjustRs35crore(Rs350million),"heasked?"
"BecauseheisanMPandaminister,Atal ji.Sohequalifieswithmuchless.BecausethebarforMPsmustbemuchlowerin
suchcases,"Italkedmywayoutofadmonition.TheDMK'sTRBaaluwastheenvironmentandforestsministerintheNDA
cabinetandownedasickbusinessdefaultingonRs35croreofloans.
WenowhaveaRtHonMPwithaRs9,000crore(Rs90billion)defaulton17publicbanksandwhenhetalksdowntousall
fromLondononTwitter,welisten.We'vecomealongwayindeed.
ShekharGupta
Source:

http://www.rediff.com/business/report/mallyabecamethebankersmostvaluedtrophy/20160312.htm?print=true

3/3