T V Mohandas Pai is perhaps one of the most recognised corporate voices from Bengaluru. Known to many by the different hats he wears, the 57-year-old is presently the chairman of Manipal Global Education Services. He is also an advisor to InGovern, one of India’s first independent corporate governance research and advisory firm which is based out of Bengaluru. As an expert on corporate governance and accounting, Forbes India spoke to Pai on the fast unfolding events surrounding his fellow Bengaluru-compatriot Vijay Mallya. What also triggered this interview is the fact that Pai recently told the media that forcing the embattled industrialist to return to India was a “bad strategy”. Excerpts of the interview: Q: Kingfisher Airlines ceased to operate in 2012, owing huge sums of money to banks, non-banking creditors and its employees. But, the banks and the government seem to be acting only now. How do you read this? A:Well the DRT (Debts Recovery Tribunal) case was filed in 2013. The DRT as per law is supposed to decide in six months, but does not work. Banks have pushed this, (and so we) cannot blame them. We have a broken down justice system.
Q: Is this a case of too little being done too late? A: It is a case of a broken down justice and legal system. The government is obviously using its sovereign powers for (to ensure) repayment, but they have to make the DRT work.
Q: In some ways the actions taken by public sector banks and the government is suggestive of a ‘precedent’ setting in dealing with big defaulters. Have they done their job well enough? A:The good thing is they have sent a message that defaulters will not get away and they will use coercive action against them.
Q: Mallya has made a revised settlement offer of about Rs 6,000 crore to the banks. Considering that he owes them a little over Rs 9,000 crore (a figure mentioned by the Attorney General of India), is the offer good enough? A: It can get slightly better. Banks too should bear some of the loss. They too are risk takers (and charge for the risk), hence they should suffer for their decisions. Q: Shouldn't the government also introspect why banks (in this case, public sector banks) lent Mallya money, despite the fact that Kingfisher Airlines was bleeding heavily? A: Yes. But need to be careful lest banks become risk averse. It pays not to decide and pass the buck where government is involved, but we need a good dynamic banking system. Q: Recently, you stated that forcing Mallya to come back to India was “a bad strategy”. Why do you think so? A: The way forward is to look for recovery, engage, and get a decision from the DRT. Now, he (Mallya) has an excuse that the government is after him — that he is in “forced exile”.
Q: Amid all the noise, what is getting drowned out is the fact that many employees of the erstwhile Kingfisher Airlines haven't been paid their salaries. As the former Human Resource head of India’s second largest IT services company Infosys, isn't this a matter that needs priority? A: The money recovered should first go to settle employee dues. Please remember Kingfisher Airlines is the borrower, UB Holdings and Mallya are guarantors. We need better protection in law for employer dues. Q: Should the banks and perhaps the judiciary also step in here? A: Yes, best for the Supreme Court to give a decision on this, otherwise it will be lost in appeals.