Kingfisher House, one of Vijay Mallya's flagship properties, to be auctioned

 The auction for Kingfisher House, one of Kingfisher Airlines promoter Vijay Mallya’s flagship properties in Mumbai, ended on Thursday with lenders to the grounded airline failing to get any bids.

The e-auction was conducted by SBI Cap Trustee, which is an arm of SBI Caps, the merchant banking arm of State Bank of India. SBI Cap Trustee Company had taken possession of the 2,401 sq. m property in February 2015. The e-auction was conducted under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002.

"There were no bidders. I think the higher reserve price was the reason for it,” said an official involved with the auction conducted by SBI Caps for a consortium of banks led by public sector lender State Bank of India.

The reserve price for the property at Andheri was fixed at Rs. 150 crore.

The lenders' move follows the airline’s failure to pay banks their dues. As on January 31, 2014, KFA owes banks Rs 6,963 crore. All the banks had classified the loans as non-performing. Some banks, including SBI and United Bank of India, have declared Mr Mallya a wilful defaulter.

Banks recently moved the debt recovery tribunal to halt payment of $75 million by Diageo, which controls United Spirits Ltd, to Mr. Mallya. The payment was part of a deal under which the liquor baron would step down as the company’s chairman. Banks also pleaded with the court to not allow Mr Mallya to travel abroad. However, Mr Mallya managed to fly out. Diageo also confirmed that Mr Mallya was paid $40 million, the first instalment of the deal.

The country’s largest lender, State Bank of India, which leads the lenders’ consortium that has extended loans to the troubled airline, had recently said banks are fighting more than 20 cases in relation to Kingfisher Airlines in various courts, including the debt recovery tribunal. There have been more than 500 hearings so far with 180 adjournments. 

Vijay Mallya loan default case: SBI consortium starts auction of Kingfisher House

Lenders to the long-grounded Kingfisher Airlines, owned by businessman Vijay Mallya, on Thursday began auctioning its headquarters - Kingfisher House - that's situated near the domestic airport here.

The property, with a built-up area of over 17,000 sq ft in Vile Parle , is being auctioned by SBICAPS Trustee, a subsidiary of SBI Caps through an e-auction.

The auction is being conducted on the e-auction property platform, AuctionTiger.

The base price for the property has been set at Rs 150 crores.

The auction is being conducted under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

The property was taken over in February 2015 by a consortium of 17 banks lead by The State Bank of India in a bid to recover Rs 9,000 crores in loans given to the airlines.

Burdened with huge losses and liabilities, including to the lenders, the airline was grounded in late 2012.

While lenders have stepped up their efforts to recover the dues totalling over Rs 9,000 crores, the founder and main promoter Mallya left the country earlier this month.

Recently, the Enforcement Directorate registered a money laundering case against Mallya and others based on a CBI FIR registered last year.

Mumbai: SBI to e-auction Kingfisher House today pic.twitter.com/CavwN9BfSg- ANI (@ANI_news) March 17, 2016

The agency is also investigating the overall financial structure of Kingfisher Airlines and will look into any payment of kickbacks.

Kingfisher Airlines faces a probe by the Serious Fraud Investigation Office (SFIO) into its allegedly 'inflated' brand valuation of over Rs 4,000 crore.

The government's white-collar fraud detection agency is probing whether such a high valuation was arrived at fraudulently to get more funds from banks and siphon off the additional money for purposes other than proposed investment in the airline. 

Keywords: Kingfisher debt crisis, Vijay Mallya, Kingfisher House auction