Kingfisher Airlines employees to receive ₹311.67 crore in long-pending dues

The Hindu
The Hindu
6h ago
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₹311.67 crore released to Kingfisher Airlines employees as per DRT order following ED's bank fraud probe and asset recovery efforts.
Kingfisher Airlines employees to receive ₹311.67 crore in long-pending dues
A What happened
The Enforcement Directorate (ED) facilitated the restitution of ₹311.67 crore for Kingfisher Airlines employees’ long-overdue dues. The Debt Recovery Tribunal (DRT) in Chennai directed this payment from funds recovered through the sale of shares attached during ED's money laundering investigation. The ED's probe revealed that significant loan amounts were diverted for debt servicing and large foreign remittances by KAL and Vijay Mallya. Assets worth over ₹5,000 crore were provisionally attached during investigations. Subsequently, the attached assets were restituted to the State Bank of India (SBI)-led bank consortium, creating a pool for settling claims. The SBI consented to prioritize employee dues over other creditors, prompting the DRT order to release funds to the Official Liquidator for timely payment to workers. This marks progress in resolving protracted dues owed to employees amidst ongoing efforts to recover assets tied to the bank fraud case involving Kingfisher Airlines.

Key insights

  • 1

    Legal priority of worker dues in insolvency and fraud cases: The explicit prioritization of employee dues over secured creditor claims in this case demonstrates a legal recognition of workers' rights in financial recovery processes linked to corporate fraud and insolvency.

  • 2

    Asset recovery as a mechanism to settle legacy corporate liabilities: The case highlights how enforcement agencies can leverage asset attachments and restitutions to create funds for addressing longstanding creditor claims, providing a model for similar cases involving financial irregularities.

Takeaways

The resolution advances the settlement of Kingfisher Airlines' dues to former employees through coordinated asset recovery and legal prioritization, illustrating how enforcement and recovery mechanisms can address protracted financial disputes.

Topics

World & Politics Policy & Regulation Governance