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Under-fire Mallya comes out fighting
Indian politician, airline owner, and Force India team principal Vijay Mallya made his first 2012 paddock appearance at the Monaco Grand Prix, putting to rest rumours that he had been banned from leaving India as a result of the ongoing problems with the struggling Kingfisher Airlines.
Given that Mallya's business woes have been in the news of late, it was hardly surprising that the Indian billionaire was grilled by the media over non-payment of his airline staff, and whether problems with the aviation side of his corporate interests would affect the long-term stability of his racing team.
Asked whether he would choose to save his airline or save his F1 team, were he forced to make such a decision, Mallya replied: "How can you even start to make such a comparison? One is a large, public utility per se. How would you call Formula One? A public utility or a public spectacle? An airline is not intended to be a spectacle and a Formula One team is not intended to be a public utility either. So where's the comparison?
"Sahara Force India is private team," Mallya continued. "Kingfisher Airlines is a listed entity. The banks own 23% of the equity of the airline. It's a public company, limited by liability as all limited companies are, so it's a plc. So the two are incomparable."
Staff at Kingfisher Airlines have repeatedly gone on strike to protest non-payment of salaries, with some employees working without pay for weeks on end. The pay dispute has been resolved in recent weeks, but Mallya came under fire for his profligate spending in Monaco in light of his business difficulties.
"I don't quite understand the correlation between sporting interests, which are personal in nature, and my business interests," the billionaire team principal said. "I have several large public companies, most of which, with the exception of the airline, are doing very well. The airline is a victim of extraordinarily high oil prices and excessive taxation. Now, what you read and what you gather from what you read is something that I don't care to comment on.
"Sahara Force India is independent, fully funded. It's a joint venture between the Sahara Group and myself, there has been a significant capital infusion at the end of 2011, another significant capital infusion from the Sahara Group is due in 2012 and going beyond to 2013. So, Sahara Force India is extremely well taken care of and set."
Asked to justify the spend on his annual lavish yacht party at the Monaco Grand Prix, Mallya dismissed the question as irrelevant."Justify what and to whom?," he asked. "As I said, I have 20 different businesses. I have six large publically listed companies, each one is completely independent with different shareholders. One does not cross-subsidise the other because that would violate all principles of corporate governance. If one business, for whatever reason, is not doing well, it doesn't mean that every other business has to shut down.
"Every business has to be continued within its own values, within its own corporate objectives and the party that I host in Monaco each year is a promotion for United Spirits Ltd which has nothing to do with the airline. So because the airline is a victim of - as I said - high fuel costs and excessive taxation doesn't meant that other public companies and their stakeholders should necessarily be compromised. So who should I justify what to?"
This article first appeared in GP Week