‘Probe conversion of Kingfisher loan into equity’

November 15th, 2011 - 7:12 pm ICT by IANS  

Chennai, Nov 15 (IANS) Demanding a parliamentary probe into the manner in which government banks converted their loans to Kingfisher Airlines into equity at a higher price than the market rate, the All India Bank Employees’ Association (AIBEA) has advised all its nominee workmen directors on the bank boards to oppose any further loans.

“We demand a parliamentary probe into the conversion of bank debt into equity shares of Kingfisher Airlines. As per press reports, banks have converted Rs.1,400 crore loans to the airlines into equity shares at a far higher price than its market value,” AIBEA general secretary C.H. Venkatachalam told IANS.

According to him, there had been over-valuation to accommodate Kingfisher Airlines.

“This is nothing but converting bad loan/debt as equity capital of the borrower/defaulter company,” he said.

In a statement issued Tuesday he demanded nationalisation of Kingfisher Airlines.

“From AIBEA, we have addressed a letter to the RBI (Reserve Bank of India) governor expressing our opposition to any further loans to the airline by any of the banks,” he said in the statement.

“AIBEA has also advised all its nominee workman directors on the boards of the banks to oppose any further bailout or credit facility to Kingfisher Airlines. In fact, the entire loans should be recalled by the banks,” Venkatachalam said.

Indo Asian News Service
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