After many weeks trying to avoid it, Vijay Mallya and several other directors of Kingfisher Airlines have finally been declared “wilful defaulters” but the state-owned United Bank of India. The move came after the Kingfisher executives failed to appear before a United Bank of India committee to discuss the situation. Once listed as wilful defaulters, Mallya and his colleagues cannot be granted loans by any bank or financial institution in India. As they cannot raise money there is now no chance of the moribund Kingfisher Airlines finding new funding in India, unless they resign from the board.
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joeblogsf1 
And the other owner of Force India is in jail for ???
Presumably this won’t affect Force India much if at all Joe? I would guess that there are different companies operating in VJ’s commercial world, and would suppose that any link between Kingfisher Airlines and F1 is tenuous?
Usually when a person or entity is in insolvency they cannot move assets or sequester them somewhere else. This seems like a retrospective declaration that affects how actions since the bankruptcy will be treated. I’m fairly sure that any money provided by Mallya to FI recently can be forcibly retrieved by the receiver or equivalent. Willful defaulter puts any subsequent transfers of money or assets into realm if a crime, which is the main difference I perceive. Not certain, but I’m sure I’m close. The obvious idea is to prevent nest eggs being laid after it’s too late to save the… that’s going the way of a awful mixed metaphor or something, but you get the idea…
I hope the F1 team is in a sustainable position. It’s a great group of people that can be so competitive on such a restricted budget.
Will this have any effect on the F1 Team?
The team says no, I am not so sure
Its a shame really. They always seem to punch above their weight. Hopefully someone will buy them once Vijay goes under (which is looking increasingly likely). One owner in default, the other in prison; it doesn’t rain…it pours!
In reality .. from a purely business perspective … and along with all the ills currently being suffered by Force India’s other major Indian sponsor …. there’s just about no way in Hades this cannot effect the F1 team . Sad fact is … this may be the final nail in the coffin that’s been waiting in the wings when it comes to Force India F1 for months about to come home to roost .
Ahhhhh… yes …. let the very Silly Season .. from drivers ….. to sponsors…. and right on down to which teams survive to see the light of 2015 and which ones do not begin … in earnest I might add 😉
Is there a marine equivalent to “Lizard Lick Towing” ? If so then it is surprising his yacht has not been “repo’d”
Oh yes, a plethora of repo men would just love to sail it away. One based right down in Wrightsville Beach, NC as it so happens!
What is your current best guess at the 2015 car count? Mercedes, Ferrari, Williams, McLaren, Red Bull, Torro Rosso are all givens, so that’s 12 solid entries. Sauber should be OK I suppose too so we can count on 14.
Out of the other 4, if they were all in trouble at the same time is there a risk we could run out of white knights to ride to the recue?
Bed + full board booked at Lucknow Castle Hotel. Preferred Guest.
I find it absurd that Mallya has let it come to this situation. Indian bureaucracy or not, sooner or later all this is going to have a tangible impact on his personal wealth and liberty, surely. Had he behaved responsibly in the first instance then he might have not only not left suppliers and staff hanging but also withdrawn with good grace and less personal liability; I suppose there is no accounting (literally) for ego! He certainly has done an impressive job of burning through a huge amount of his father’s money for little return. It is remarkable that so far his and the Sahara Group’s travails haven’t had an apparent impact on the F1 team.
This has been going on for a long time. Here’s a link to an April 2013 article in the Wall Street Journal (not your average rumor rag) as to Kingfisher Airlines and what was happening to the airplanes. No doubt he knew what the outcome would be but didn’t really care:
http://online.wsj.com/news/articles/SB10001424127887323550604578411920601325786
And what about not paying your employees for a year? Why are they still called ’employees’?
Actually the WSJ has some writers to be wary of. The name of the journalist is still important.
There’s other sources for that story, also:
http://www.indiainternalflights.com/News/Lessors-Thankful-Kingfisher-Airlines-20130426.php
And https://www.fitchratings.com/gws/en/fitchwire/fitchwirearticle/Lessons-Emerge-for?pr_id=789311
Which adds, “it is clear from media reports… that some aircraft have been stolen or damaged…”
I’d take the Fitch view as more reliable, no matter what you think of ratings agencies, they would likely be objective. I’ll not discount that they may have been paid to rate Kingfisher debt, and so wish to play down any negative view, but I presume they have, through their contacts with the leasing world, the ability to confirm if this has happened.
Stealing aircraft components seems a bit difficult to do, but equally the repossession of aircraft has been very difficult for lessors, who haven’t been able to gain access, in some cases, and met governmental interference also.
I suppose anything could be the truth.
As for the WSJ, it’s been given to some unusual tendencies in reporting, long before ‘ole Rupe got his hands on it. I’ve a example, but it’s too long in summary, and has the tiniest most tenuous connection with F1, but I think they once did someone’s dirty work on their front page. Joe’s right, consider the source, and remember if you were being told the story in person, you’d pay attention to who was telling you.
Sudden thought: If there’s truth to this story, I hope it’s unpaid employees getting something out of it, to feed their families. That I can imagine happening, and I say good on them. Several reports quote lessor executives saying they learned valuable lessons in this process. I hope that will mean finance is less forthcoming in the future to inverted Robin Hoods.
Just another thought: I was always curious as to whether the Indian love of cricket was attachment to them sense of fairness that that game symbolically represents (“Bodyline” series and other scandals notwithstanding) and that appeal to a quality of fairness and gentlemanly play, all the more attractive in a post colonial life, accentuated backdrop a country rife with petty corruption as almost the only way of getting bureaucracy to function. My thoughts lead into how F1 is governed and overseen, because India is such a prize, if F1 can woo hearts, I think cleaning up the sport is essential marketing.
A nuisance but not a show stopper. This will kill funding from India with loans. However its difficult to get money out of India these days anyway with the restrictions on export of capital currently in force there. This will not cut off sponsorship income or any loans from non Indian banks.
Mallya’s ego may be hurt more then the (English) team.
William275 ; Sorry to be the bearer of very bad news …. but errr … despite being based in the UK Force India is about as much a British team as JLR is a British auto manufacture these days …. which is to say …. neither are …. in the slightest . And errr … cut off the heads of the two Main Sponsors …. and … hmmmn … well …. ahhhhh …. all the rest of the rats [ other sponsors ] will jump ship as well … sooner than later I might add . Thats Business 101 !
Guitarslinger: If the name and faces in the team get to tainted or run out of money, change the name of the team. Its an old recipe that is tried and tested. In the last ten years this entry was called Jordan, Midland, Spyker and Force India. Change the name and sponsorship continues to run in.
You take a wide explanation for the “English” I used above. Its merely an indication that the entry (and its bank account) do not depend on India for banking/funding purposes.
The financial situation around the Force India owners is nothing new for F1. The sport just continues to attract a certain type of personality. It did in the 70s and it still does today.
Or Punctuation 911 😉
Says a veritable culprit, shameface!
Fear for the future of the Force India team. Troubling news for them, given how they’ve picked themselves up this year.
With Mallya under increasing pressure from the Indian authorities and sponsor Sahara’s Subrata Roy needing to sell The Plaza Hotel in NYC just to make bail (of $1.6 billion!), things really look bleak for FI.
$ 1.6b bail. That can seriously tempt the magistrates themselves.
I wonder if they too will share porridge vindaloo in Lucknow with VJ and Sahara
If the F1 team needed to be off loaded I’m sure it wouldn’t take to long to find a buyer, Catherham were a less attractive team but were sold.
But for how much?
Not a lot I guess. Could have even been a negative amount if some debts to the previous shareholders were written off.
And with what staff?
And as ChrisD says, negative value, possibly, I’m thinking of employment contract liabilities, but also that brand has to be written off the books. Branding is often very complicated. Ikea’s brand is a integral part of their tax minimization structure, owned by a (IIRC) Danish family trust, managed through the Netherlands, trading out of Ireland and back again, and so on. Point being, use of the brand is charged to subsidiaries, to create transfer pricing which can reduce local tax bills. Tony knows a thing or two about brands, so I’m concerned how intertwined things might be.
Joe – whilst this is undoubtedly bad for KIngfisher, surely VJ has smart enough accountants to separate some of his personal wealth and FI from the Kingfisher creditors?
Vijay is smart enough to be declared a willful defaulter.
lol!
Well let him have his money… in say fifteen years, on release, if he’s so adamant it is all perfectly lawfully attained.
I know that comment comes awfully close to the german settlement, but what bugs me about fines is they never see their way to anyone who has been harmed or so rarely do, making them a kind of tax, a cost of doing business, in a relationship between regulator and regulated entities. The SEC was campaigned for by merchant banks and stockbrokers desperate for legitimacy and depositor confidence.
But if money goes direct to who is owed, and starting with the smallest creditors, the most vulnerable, let culprits pay their way out of trials and jail. The duty of the law should be to protect equally those who cannot protect themselves, or else the law has no function.
In this situation, the more protracted is the legal wrangling, the greater the pain endured by employees and their families, for all I can see, as no other help is forthcoming, likely even after all’s said and done.
Why does no government seem to think they can change public perception and trust positively? Exceptions are made all the time, I think the risk of precedent setting is almost irrelevant. The punishment of a considerable part of life, spent building a business, shattered, is quite real enough. Leave the man to consider all the short cuts or moral decisions ill made, or even genuine personal sacrifices. Those add up, even in a faultless career. Take away the result of long term hard work, and there will be the punishment of self doubt regardless of how well a life was led, for made poor you will reflect on the moments you might have better spent. If the purpose of punishment is for a guilty party to atone, let it start the earlier.
I could care less, about any worry someone got off lightly, because with the vast disparities in wealth astoundingly visible, the greater concern is public unrest. And if not public unrest, then the erosion of trust values, and increase in irrationality that can be commensurate with uncertainty, worry, and reduction of chance for safe economic progression through life. sadly I have thought, for a long time now, that embarrassingly draconian instincts exhibited by lawmakers, are nothing but a recognition of imbalances risking social turmoil, and preparing accordingly. Taking settlements from wrongdoer businessmen has to be the cheaper and mire palatable policy, if done in nay way that makes people feel life is that bit fairer.
Why are you so anti-Vijay Joe?
I am not. I am writing the news? Why are Indians so protective of a man who has left a string of disasters behind him, leaving people unpaid, out of work etc etc
Hi Joe,
Not all Indians are defensive of Mallya. I hail from the same city that Mallya comes from – I think it’s despicable how he has ruined the legacy created by his father, left countless unemployed and provided further reason for the generalisation that all Indians are corrupt.
The answer to that question Joe, would likely be that Indians are proud people, and VJM has brought them a big part in a global sport. Indians love sport, and Force India has become quite a player, after all it is in a fight with McLaren at present. I think that VJM is well liked for that reason mainly.
Is there no Indian capable of speaking?
Our pride has nothing to do with defending Mallya.
As with many things in this world, it’s not all in black and white.
Prior to the Kingfisher Airlines debacle, a lot of what Mallya did – expanding his business overseas, acquiring items part of Indian history, investing in global sports – could be termed as good and played a role on putting India on the global map.
Not condoning what Mallya has done, but growing up in India gave us a holistic picture of his efforts versus the picture painted in international news media which has a tendency of reporting much of the negative news emanating from India, and very little of things of a positive nature.
No, I think you will find that Mallya got plenty of positive ink before his debacle.
Joe you should probably do a bit more to report on the Vijay Mallya employees who I believe are on a hunger strike and some I believe have committed suicide, stuff like this:
http://www.business-standard.com/article/beyond-business/1-500-lives-interrupted-kingfisher-airlines-employees-left-high-and-dry-114080801126_1.html
he really isn’t, any team principal with Vijay’s problems would be reported on the same way, whether it be Ron or Frank or Vijay, I have a lot of time for Vijay as i think F1 needs characters to be attractive but for an astute business man who made himself very successful to be declared a wilful defaulter isnt good is it?
LOL, Joe is just reporting on the status of a team owner. The report is not anti anything, it’s just the facts and no opinion what so ever. Force India is a great little team. And I recall many of Joe ‘s reports on Force India triumphs. I’m reasonably sure he’d like to see the team survive this period of turmoil with both owners in debts over their heads.
Hardly novel observation, but yes, I think most fans think FI are a great little team, just what the spirit of the sport needs, in many ways. Pity about the belated owners. It’s impossible, a, least I think so, not to want them long gone, and in general any suspect characters away from F1.
Surely there is a healthy pool of wealthy Indian magnates from which one might step forward, and continue the name? Maybe fix that circuit of theirs, too. Capturing minds in India is hard, but there’s always a healthy, in every sense of healthy and positive, national pride, and F1 could be enormous there, in F1 terms, long before cricket fans even notice it exists. It would be a wonderful market to crack, and I’m a little surprised how long it took for anyone to try.
Can anyone tell me if F1 is free to view, in India, and what the coverage is like?
If it’s Sky or pay per view only, that’d be a injustice, in my book. We need only the tiniest penetration by the numbers, into India, to have the whole sport profit, and I don’t mean just in dollars, dinars drachma dinar or rupees. There’s still a very busy print magazine market, in India. I could believe it, if a magazine or even half a dozen, would spring up, and it would be great to read the results.
Shutdown saw a lot of investment into the facility and cfd upgrades so I suspect they believe they are ok. Plus they paid me proforma which was even better.:-)
We have been at this point for 2 years at least and whilst it can be seen as slightly more ponderous now
“Reports of my death have been greatly exaggerated”
G’day r.bartlett,
😉
That is really good to hear. It’s great to see such a small team punching so far above their weight. I really hope the money does not slow down.
beers,
build
If Force India was put up for sale, I wonder if Ecclestone would try to find a US buyer…
Hey, I can dream, can’t I?
Good dream. They deserve a better master, and better than just a master. I bet there’s such pressure on Haas to not just buy a team, though..
Leaving aside whatever shenanigans Mallya has been upto in his other enterprises, I don’t think you can say he’s been a bad master of the F1 team. Taking his F1 exploits in isolation, he’s been remarkably successful; I can’t think of another team that has improved not only so much, but also so consistently year-on-year since 2008. Who knows how (and who from) this has been funded, but despite years of rumours and outright bad financial news for Mallya and his partners, the team has continued to go from strength to strength. I hope this isn’t the beginning of the end for a good F1 team.
Force India were well guided, internally and externally, when they signed the deal giving them access to McLaren technology. Sceptically, one might view the deal as a pre-emptive measure to keep Force India competitive prior to the “cost reduction measures” and entry of new teams in 2010.
Even skeptically thinking that, is skepticism with a nodding respect, in my book. Hmm, the idea of VJM cannily long range planning and hands off managing a team, with a hint of it being his escape plan from once hidden business strains.. that’s quite some story to tell. Can you imagine the interviews, a year or however long hence? Wow, he’s look like a conquering hero casually walking from the explosion with only cosmetic burns to his tuxedo! Anyhow, we all wish the team well, I guess, so why not allow the thought they owe it to someone who is a person we can really rate and respect?
None of this is impossible. Many business problems loom years ahead of their eventuality, and I can say too, about different long term worries maybe more so, but big long term worries start making a event horizon appear that’s increasingly hard to predict the closer you get, until time and space warp you into that black hole, and time and space turns out in retrospect to have warped mire than the physical fabric of the universe, but every ability to see clearly… because you saw it coming, you knew what was going to happen, sort of, you cling to pride in your abilities or adaptability, all manner of little things that seemed aligned were never in the same dimension, when you look back, and there is never really just a aftermath and a but of spring cleaning to be done, there’s that bloody black hole left where’s all your work and woes blew up so spectacularly, and though they are by definition hard to see, people feel the gravity. Yes, if this is VJM’s story, I hope to be among the first to apologize profusely and profoundly for all my talk of blighting the sport. And I shall genuinely then show respect to the man. I’m not going to end this with a caveat, just say I live a turnaround, and even if he’s not a bad boy, he could use the bad boy made good angle to great effect, and I think it all might end up seriously good fun. Guaranteed shed loads of press end television coverage that would be highly positive in promoting F1 in India. I’d like that, a lot.
I’d be delighted if Mallya could show clean hands of the affairs, sell them off or whatever he has to do, and prove to be a exemplary team owner. I’d really be delighted. We could do with some fairy tale endings.
Also we might be unfairly tarring Mallya, for we cannot know whom he might be protecting, or what he knows but is hushed by even political interests, or plain bad management, rather like BayernLB seems to have just been a bunch of bad managers needing someone to blame… but having once been trapped into a merely associative link with a abominable situation, even if you have proof positive, it can be impossible to do more than walk away and just try to breathe in fresh air. Maybe Force India has been spared any, shall we say sharp practice, in mind of it being a potential escape, future career, sinecure or the similar.
I believe VJM’s interest in racing is the one genuine thing about him, and maybe it’s time to dig deeper, when next he’s reported on here, because we could yet have his company over the long term, and he is at present a free man. Given the possibilities he might have to flee and begin a life in luxurious exile somewhere, it is a very strong argument in his personal favor, that he is still free. Let’s bear that in mind. I shall, at least, in future. That he’s all too close to real trouble, is plain to see. He’s, as was joked about above, too smart to not be seen as a “willful defaulter”, and that may only say that you can’t argue sensibly he was so uninvolved with his business that on balance you have to deem him “willful defaulter” just because the alternative would be ridiculed.
So, for sake of hope in fairy take endings, I will modify my thinking, and even think again, and read about. It would be a great twist, for VJM to turn out to be a better, even distant, manager of his team than we, or I have allowed. And one can’t blame him for harming the team itself, only worry how long this awful association can continue without some knock on effect. Yes, I’ll have a think again, because otherwise I’ll end up crying wolf. Maybe he is a wolf. He looks like one, acts like one, and so on, but maybe he’s not the one who ate the baby. If he’s innocent and comes clean, and all he has left much of anything, is a F1 team, that would be most interesting. I’m sure he can handle the “piranha club”…
you’re very verbose. i’m tempted to reply w/ tl;dr, but that would be rude. VJM claims he is not a willful debtor.
VJM says, “I have not borrowed any money…[so] if you continue to refer to me [as a willful debtor] in my personal capacity, it conveys the wrong impression that I’m a debtor in a sense, which I’m not…” (!!)
So sue ’em for libel, VJ, no?!
One can say that one went to the Moon but it doesn’t make it true.
Ouch. You’re saying he’s a phony as DRS-enabled overtaking?
All kidding aside, I’m very interested in this story, as it seems quite exotic, originating from India, a place I’m only familiar with through the movie “The English Patient,” which I don’t think was set in India at all, but rather, Cairo and the desert and Italy. Not being British, I don’t have a good understanding of Empire, but there’s just something czarist about VJM and his co-conspirator Subrata Roy – they’re like mythical Bengal tigers, only cuddlier.
I think our humble Joe Saward should write a book chronicling the rise (and inevitable fall) of this most fascinating of Indian dynastic enterprises.
And btw: how big of a fraud – or a mark – do you have to be considered 2b for a judiciary that’s itself notoriously corrupt to demand you post over a billion dollars in bail???
Time will show all.
This has wider repercussions for the sport and for India as a trading nation.
F1 doesn’t need this kind of bad press (generally, not here, Joe) and it will be reflected in sponsorship deals being harder to find, especially at the back end of the grid.
God knows, India needs some positive news, not this.
I think it’s a terrible outlook. I was not paying attention when these new teams came in, because I was confused by it all. Now I see it as numbers stuffing, trying to fill the grid quick, pre flotation. I can’t honestly say there’s any new entrants I think should be there. Rpaco has the angle on how the FIA hurt the feeder series, to which I add, they were sources of new teams, also. In protecting the franchise, they made it too hard to enter, but hurt the viability of lesser series racing so much that I can’t see teams coming form there, any more. Then people are surprised when a driver or two gets to skip all those experiences. I wonder if they are competitive enough, technically advanced enough, dint being sidelined, to offer the path they did. For so much interest, even cursorily, to pass to LMP, from F1 fans, indicated to me that the usual order is long broken. F1 may be stuck in its ivory tower. I guess if you’re stuck in a ivory tower, you can play emperor naked, unembarrassed, for a fair while. (my metaphors seem to only reflect what I want to say by being as messy as the state of affairs I’m commenting on)
You are bang on the money JoJ! In the past firms like Matra,Lotus,Brabham,March,Lola,McLaren etc etc, built F2 & F3 cars, and there was interchange in engineers/mechanics/drivers, so there was a flow path to F1. Bernie started to shut that down with F3000 and nowadays people can seemingly jump from karts to F1, with hardly a breath inbetween….no wonder things are out of kilter in motorsport. I don’t think much will alter until Bernie is finally gone, although more F1 teams may well go under. To cover that off, it seems Bernie will just get 3 car teams going, so one could see F1 in 2-3 years with just 8 teams or fewer than that.
Hi Damian,
I rather feel like the money has been banged on my head rather hard, and it’s the funny monopoly kind..
When I was a lot younger, I used to rather sneer at the DNPQs of the game. It seemed beyond sad. How naïve I was, to not see how important they were. Or, rather the possibility of turning up with a entry and passing scrutineering and qualifying was so elementary. Not all teams can be remembered with fondness, but when I was reading something of a litany of teams that popped up, often only for a hello goodbye, from twenty years ago, I actually felt sentimental towards even those I could not recognize.
But, twenty and some years later, we arrive at, well, what did sorting out the shambles result in effect? Did every team turn out to be exemplary businesses… or do we need to remind ourselves of Ron Dennis pointing out there was not more than one other team who could afford such a fine (of the time)? It really is not like the rag tag mob was hurried from the grounds and a perfect party of impeccable professionalism ensued.
It’s taken a long time to put down all that world, I’ve grown up and grown grey hairs meanwhile. How long would it take to regenerate, to revive?
If there was willpower, big things could be done. The FIA could start obtaining for use even old data that would be very useful. There could be action on collective sponsorship efforts. Yes, things can be done to radically improve the opportunities.
But we what about the talent and culture? There’s no F3000 but this GP2 thing. Standard chassis and all the rest. Brain child of Bernie and Flavio, and it shows. What engineer can cut their teeth in that, and move up, or which F1 engineer thinks GP2 is not so much worse than a demotion? I hope I’m not taken as demanding the talent that’s there, but it’s surely not the right kind of proving ground.
Then there’s a question what talent rises up, and bow they earn a living. GP3? Standard cars again. Where can a constructor come in any place in this? Force India did the best deal maybe of anyone in recent years, and Haas is trying he similar, but none of this is helpful when what you need is home grown ingenuity. Learning is so much harder when you’re doing so in ever narrowing confines. Even drivers are being treated to more homogeneity, ẃe may yet look back and miss how Seb V mastered such a unusually machine, for there looks to be diminishing chance of variety. Not that I want much to change now in F1, but in series below, there needs to be variety, I just don’t see this idea of being fairer comparison on drivers helping much at all.
Still, there’s a lot in theory that would be great advantage now, compared with twenty years ago, let alone when I first started watching barely older than a toddler. Prototyping, simulating and emulation, all are faster, cheaper by the day. Access to machine shops is realistic, if you don’t own one, because of the new rapid technologies. Visualization and pre manufacturing tools enable that, and precision measurement exists affordably, to tolerances that might cause designers of times past to weep. And materials and especially materials testing, in simulation for stresses and in examination for unwanted crystal formation weaknesses, and so on, are amazing. If it were not the need, and indeed wish, of most viable engineering companies to take on apprentices and freshly qualified talent, you might even be a “shopless” manufacturer, simply assembling components for testing. A garagiste, even.
And maybe the real clobbering my head is getting, with all this money business, is what if there were drastic cost cuts, even for reasons outside our control, such as market crashes or the like. Where do all the existing talent go? Back to the problem with not having F3000.
I hope this long term problem, is one in the sights of a certain M Todt. For he certainly must be absolutely conscious of it, as a structural disaster that barely seems sound. Maybe he’s quiet in F1, because he needs every bit of political capital to set these things straight.
But anyhow, if you could do the unthinkable and radically change things, you could almost with a single sweep catalyze the whole sport anew. Put in real cost caps, tell those looking for jobs they can go build F3000 cars, and I guess some F1 teams will want to fund them to do that, mix in a few other things, and you could almost present the new situation as being “thanks to F1”. Oh, that spin would make me ill, but how many would know otherwise, and would that matter? I’d not be complaining.
Illcontent with his ivory tower, Bernie got the FIA to dig a moat, and everyone else to build a fossa wall of uninspiring cookie cutter chassis. It’s just begging to be rushed and hurled up at that high window. I think by now, at least, nobody takes Bernie seriously when he says he’s going to come up with great innovations for the sport, over dinner with Briatore. Look at what the past ones have done. The present excellent racing seems more a miracle of miscreation. I do sympathize with Jean Todt, if he sees is as a delicate accident best left as much as is, as possible. Just I’d like him to give us the other racing back, before we do run out of teams or iffy millionaires.
Hey Peter, F1 has Bernie….I don’t think any bad press by any team principal could possibly worse than anything Bernie can bring to the table!
But the combination means we focus variously on one baddie and then the other, it’s a tag team!
Obsession. All one’s got to do is hit the posts search for the words “Vijay Mallya” to see that it will return more hits than “Michael Schumacher”, “Bernie Eclestone”, “Lewis Hamilton”… even Tonio Liuzzi!!
Use your brain. If someone is in the news more than another person, then what will happen?
iGOR,
I tried, “Mallya” has one page to 2010, “Ecclestone” has 21 pages to 2012, even Schumacher and Hamilton exceed Mallya. Ecclestone is Joe’s favourite subject but that is obviously expected on any F1 blog over time.
Scratch “obsession” and enter “nasty saga reflecting all anyone never wants”, and you have it.
Also, the general media took a while to catch up covering VJM & Co.’s exploits. One can put that down to how much advertising the brewery and distillery and airline put into the market. Joe was doing a great job by any standards, when you look at the non F1 scene, also.
If you love a sport, and it’s being mucked about by unpleasant distractions, left and right, is it not normal to make a point of who is the source of so much worry? And neither Bernie, nor any other name, has been responsible for so much woe and maltreatment of so many employees and investors. It’s a big story, and I’m amazed, really, how little attention it gets. I don’t think the general press is so inured to scandal and vast financial schemes coming unhinged, that that alone explains the relative quiet of coverage. I enthuse about the print magazine world, in India, but not much so about the news press, which is riddled with, ahem, conflicts of interest, and arguably was reluctant to report any of this, and probably had wind of the massive machinations of monetary manipulation long before. In the early coverage here, I was convinced there were people coming to comment only to AstroTurf and deflect and misinform. I would love to hear from any Indian who could tell me how things went, in the online media and forums, over there, and if there’s any discussion action or current rumor mills, or moves to save face or the like.
There are still side shows of intrigue, that inevitably cross over into F1, such as the use of companies in Mauritius, and other offshore schemes, the kind of which infest business and arguably deprive normal people of tax revenue at a time we are facing intense all fronts draconian front and back door taxes. In a big money sport, with such international presence, this scandal has a place to be mentioned, possibly even without the F1 connection.
” There are still side shows of intrigue, that inevitably cross over into F1, such as the use of companies in Mauritius, and other offshore schemes…” << < < < please contextualize with specific F1 related detail. I very much enjoy reading about such pseudo-criminal endeavours.
Joe S., will you do an interview with Adam Parr, please? Something really bare-faced, where you don't throw softballs but he throws dirt on Bernie & Co. and the corrupt/incompetent enablist media that shills for them?
Will you go to a lion’s cage, tie a pork chop around your neck and go in shouting: “Here Kitty…”
As an Indian, I hope to see his airline dead (so that he cannot sink more money into it), his jet & yacht seized to recover money and paid to employees of KFA who have gone unpaid for several months (me or any of my kin is not a KFA employee). Glad to see his other partner (Roy) still in jail. I hope he sells the team so that I can appreciate the work they have been doing.
Thank you, Anshuman. Especially for your last sentiment. That is important to note. If you cannot be proud of a great performing team, because of its association with these low down schemers, that matters to the sport. I agree with you, I hope FI is sold, and I hope to a worthy Indian owner, who will take good care of it. There are so many who could use the team as well as Red Bull have done, and profit handsomely. The essential thing is certainly to learn also, how Red Bull make their marketing work for them, so they can afford to spend like that. If someone does that, they’ll have a real bargain.
Mallya’s decision to go into the booze business was a wise move. He bought some internationally known brands in a business which requires relatively low capital investment. With the exception of protected products (Scotch whisky, champagne, cognac etc), you can pay somebody to make it for you.
Mallya’s decision to establish an airline mystifies me. An airline carrier demands lots of capital and if the business stays afloat it will return a net profit of a couple of % per year. There is a tiny chance of making a killing — which Mallya might have hoped in a growing Indian market — but it’s a gamble. It’s a much bigger gamble, for example, than a European low cost carrier which would receive subsidies from the regional airports it served.
It looks like Kingfisher Airlines and the booze business on which it was built will be lost. Even if Mallya’s share of Force India is sufficiently offshore, his future involvement is uncertain. Force India is dependent on Mallya companies for much of its budget, which will need to be replaced. Adrian Sutil brought some sponsorship when he drove for the team; Sergio Perez brought money from Claro (telecomms) this year.
I hope the team finds a responsible new owner.
He inherited a booze empire
He got it the old fashioned way!
Anyone’s decision to start a airline bemused me. I am given to understand that not one has ever returned a penny in profit to long term investors, maybe Southwest and Ryanair have done well for founders, but under atypical conditions and in the both instances atypically smart management, whether you like how the latter goes about their thing, or not.
It’s been a rotten time too, with oil prices, but for any airline founded or created within the last thirty years, did nobody look at the cost of oil when adjusted against indices, and see the all time lows, at twenty and less a barrel, and not think, “oh, this can’t last”. I don’t know how Virgin does, but they are a niche carrier, with a prime slice of a straitjacket regulated route, who had a quirk of politics, and a man called Freddie Laker on their side, which set them up very nicely.
I think the theory must have looked good, to start a regional airline in a increasingly affluent India. But then surely the best idea was to sell it, at a certain point. Did the owner become too attached? Or was there a reason, like funny books, that meant it couldn’t be sold? That last one strikes me as possible, you can hide a multitude of woes, because the leasing world is as opaque and complicated as any derivatives game. The lessors are saying “thank you for the lessons we learned”, but learning them only because they needed to exchange notes, to find out if anyone still has any collateral. Such agreements are very complex to unwind, just like solving a mini Lehman.
My theory is at the moment, that there was a problem somewhere in the not so recent past, a crack that got papered over, and maybe a genuine trading mistake. All airlines suffer volatility, and when you can shuffle money around a group, it may be all too tempting to do so, and maybe just confuse oneself. So many scams are the result of ostensibly well intentioned men who get in too deep. Maybe almost all of them are, one way or another.
Re lots of capital, the problem again is the possibility in theory of being able to borrow long term for nothing, and so it doesn’t make sense, it spoils your numbers, to take on real capital. My mind is now drifting to thought of whether the interest rate environment was not the fault that was pushing the crack open. Not many people expected long term policy on rates to continue as it has done, going back some time. I believe that here’s so much room for genuine mistake, and the question is what crime if any there is in how its been covered up, or who covered up what at what level, both Kingfisher and also AirAsia seem to have suffered from byzantine management layers and complications therefrom. Maybe VJM’s only crime is denial of what was happening. At least today, I’m hoping there will be some resolution that overturns my impressions of the man. If he has the slightest chance to come clean, or get out, or do anything that results in fairness to his employees, I’m prepared to hear it out.
Anyway, what are we doing in a F1 discussion pointing to other investments being a bit suspect?!!!
Has anybody noticed how much Mallya looks like Briatore? 🙂 And they even have the same tendency for shenanigans. Maybe they are brothers? 😉
This is such a strange comment.