The Union Ministry of Corporate Affairs (CA) on 1 December 2014 rejected a proposal for reappointment of Vijay Mallya as Managing Director (MD) of Kingfisher Airlines which has remained grounded since October 2012.
Moreover, the company’s shares were suspended from trading due to penal reasons.
Background
The cash-strapped Kingfisher Airlines suspended operations in October 2012 after its employees stopped the work over months of unpaid salaries.
The Directorate General of Civil Aviation (DGCA) subsequently suspended its flying licence after the airline failed to produce a business plan to restart operations.
All of Kingfisher's planes and some of its properties have been seized either by leasing companies or banks over constant defaults on loans.
Moreover, Vijay Mallya is already engaged in legal tussle with several lenders who are trying to recover their loans amounting to thousands of crores of rupees from Kingfisher and some of them have also declared him as a wilful defaulter.
However, Kingfisher Airlines under Section 269 of the Companies Act, 1956 applied to Union Ministry of Corporate Affairs for approval of the Central Government for reappointment of Vijay Mallya as MD of the company for a period of five years from 16 October 2013 without remuneration.
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