Kingfisher Finvest India Pvt. Ltd., on Tuesday opposed the plea by State Bank of India (SBI)-led consortium to lift the company’s corporate veil at a hearing in the Debt Recovery Tribunal. Counsel for Kingfisher Finvest India said the consortium’s “interlocutory application cannot stand in its present format.”
The bankers want the DRT to lift the company’s corporate veil so that its real corporate nature would be revealed, and shareholders held liable for its corporate debts.
Kingfisher Finvest India’s lawyer, however, said the company was neither a party nor a guarantor for the loans taken by Kingisher Airlines, United Breweries Holding Limited (UBHL) or Vijay Mallya. It is just a pledgor. Therefore, as per the existing laws action cannot be initiated against the pledgor.
“Instead of the banks going after KFA, UBHL and Mr. Vijay Mallya to recover money that was availed by the defunct KFA, they are needlessly making an attempt to recover the liability from a company which has nothing with to this case,” he said.
The company also said it was not liable, as the shares pledged had already been sold by the banks and the money recovered. It sought the dismissal of the plea as such a claim was nowhere mentioned in the Original Application.
However, senior counsel for SBI countered the argument, saying Kingfisher Finvest was fully owned by Vijay Mallya.