Auction for Mallya’s Luxury Jet Fails; Receives Only One Low Bid
A UAE-based company was the only bidder who qualified on Day 2, and raised a price much lower than expected.
The service tax department has officially rejected the online bid of Vijay Mallya’s luxury jet Airbus 319, which was up for auction between 29-30 June 2016, due to an exceptionally low bid from only one bidder.
UAE-based Alna Aero Distribution and Financial Holding (AADFH) was the only bidder to qualify by Day 2 of the auction having had deposited Rs 1 lakh in earnest money. On Day 2, they raised an offer price of Rs 1.09 crore which was well below the reserve price of Rs 152 crore set for the jet.
The e-auction was held by Metal Strap Trading Corporation (MSTC), a government-run company dealing with domestic and international trade. They had seized the Airbus is 2013 in an attempt to recover the Rs 938 crore service tax the now defunct Kingfisher Airlines owed them. They were hoping to recover anywhere between Rs 150-200 crore from this auction.
Mallya, who is currently residing in the UK on a diplomatic passport is a much wanted man in the country. Estimates suggest Mallya’s owes more than Rs 9,600 crore to a consortium of banks for the loans he took to run Kingfisher Airlines.
A Mumbai special court issued an order for Mallya to appear in court before 29 July. If he fails to do so, the Enforcement Directorate is mulling over invoking the India-United Kingdom Legal Assistance Treaty (MLAT) to extradite Mallya.
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