Vijay Mallya: The poor bank’s Donald Trump

21 March 2016
Vijay Mallya's finances were still very unstable.
IndiaPictures/UIG via Getty Images
Vijay Mallya's finances were still very unstable.
IndiaPictures/UIG via Getty Images

A recently discovered video on YouTube is a 1998 interview of the business baron Vijay Mallya by television presenter Nikki Bedi. Bedi asks Mallya for his thoughts on being referred to as the “Donald Trump of India.” Mallya eloquently replies, “Well, I don’t know Mr Trump personally. I have read a lot about him. He obviously likes to live his life as I indeed do, but I am not yet anywhere near bankruptcy.”

Even then, Mallya’s gumption was hardly justified. Prior to the recent Kingfisher Airlines debacle and even prior to the 1998 interview, though he was not quite bankrupt, Mallya’s finances were still very unstable. The comparison to the current candidate for the Republican nomination for President of the United States Donald Trump wasn’t far off the mark.

Both gentlemen have a similiar style of transacting business. Both of them rely heavily on leveraging debt to buy out companies, and both have repeatedly relied on their respective governments to bail them out. Time and again, a number of ventures under their name have applied for debt-restructuring—a process that helps companies facing cash flow problems to renegotiate their debt, so that some funds are released for business operations—and despite the frequent liquidity crunch in their companies, both have amassed massive wealth for themselves. Mallya and Trump were both bequeathed a massive inheritance, and have proceeded to splurge it on expensive cars, yachts, gadgets and apartments across the world.

Trump Taj Mahal, Trump Plaza Hotel, Trump Hotels and Casino Resorts and Trump Entertainment Resorts have filed for bankruptcy in 1991, 1992, 2009 and 2011, respectively. Mallya's list of bad financial decisions includes forays into companies that have no connection to the UB group's core liquor and beer business.

All throughout Mallya's career, his ventures outside the core business have rarely taken off. On the other hand, the liquor business started by Mallya's father continued to be a major market player and the golden boy of the UB group stable. Mallya allegedly took liberties with that business as well and diverted funds from the alcohol business to the now defunct airlines.

Kaushal Shroff is an independent journalist. He was formerly a staff writer at The Caravan.

Keywords: Kingfisher Vijay Mallya Donald Trump