An Indian court Friday ordered the arrest of the high-flying owner of Kingfisher Airlines for bouncing cheques, adding to the beleaguered airline's woes as its struggles to resume flights that have been grounded since the start of the month.
The cash-strapped airline has stopped selling tickets on its website and is still trying to convince pilots and engineers who haven't been paid for months to return to work. The airline had promised to resume flights Friday.
A court in the southern city of Hyderabad issued an arrest warrant for Vijay Mallya on charges his airline bounced four cheques worth more than 103 million rupees ($1.9 million US) to the consortium running the airport in the city. The money was meant to cover landing, parking and navigation fees at the airport.
Kingfisher can approach a higher court for a temporary stay on the warrant and it's unlikely that Mallya faces immediate arrest. But it wasn't clear what his next move would be.
"We have not been served with any warrants," said Prakash Mirpuri, Kingfisher's vice-president for corporate communications.
Industrialist Mallya is famous for his flashy lifestyle and lavish parties attended by fashion models, Bollywood movie stars and cricket players. Mallya's United Group is India's largest brewer and owns other businesses in industries from chemicals to information technology. He also owns Force India, an F1 team and Royal Challengers, a cricket team that plays in the Indian Premier League. His net worth is $1 billion, according to Forbes.
Kingfisher, once one of India's best airlines, is now battling for a lifeline with India's airline regulator, which has asked the company to explain why its licence shouldn't be revoked. The company is also drowning in debt.
The Center for Asia Pacific Aviation, an airline research group, puts Kingfisher's outstanding debt at $2.5 billion, including about $1.1 billion in bank debt, and says its accumulated losses swelled to $1.9 billion by the end of June.
