Vijay Mallya has owned the top-rated Kunigal Stud Farm since 1988, but after his escape to London, it has been struggling financially & is facing foreclosure.
Bengaluru: Vijay Mallya is in trouble, and all he has touched seems to be turning to dust. First, it was his Kingfisher Airlines that was in dire straits, and now, it’s his stud farm in Kunigal, Karnataka, considered one of India’s top horse-breeding farms.
When it came to the troubled airline, Mallya was at least able to shut it down. But he has a bigger problem with the stud farm. He still owns shares in the company running the farm, United Racing and Bloodstock Breeders Limited (URBBL), but he is unable to sell them.
Mallya wants to exit the business, but the Income Tax Department has made it impossible for him to do so. When the Debt Recovery Tribunal announced the sale of his shares, there were no takers, for the IT department had issued a circular warning people they would be liable if they chose to buy the auctioned shares.
Also read: Elated by UK court decision on Vijay Mallya: Ousted CBI spl director Rakesh Asthana
‘May even have to foreclose’
Legend has it that the Kunigal farm is one of the oldest stud farms in the world — it was purportedly used by Tipu Sultan, the 18th century ruler of Mysore, to rear horses for his cavalry.
In the modern era, though, the farm was never a money-spinner. According to the farm’s official website, Mallya formed URBBL in 1988, but sources say it has been a loss-making company since 1992, which was being maintained largely because of Mallya’s passion in horses and his interest in racing.
Since Mallya escaped to London, its finances have dwindled and the management has had to sell nearly 50 horses in the last one-and-a-half years to make ends meet. Each horse reportedly fetched between Rs 10 lakh and Rs 15 lakh.
“We have annual loss of around Rs 3 crore, and we require around Rs 10 crore to maintain the horses. Now that the number of horses has come down, it is around Rs 8 crore,” Zeyn Mirza, managing director of URBBL, told ThePrint.
“At full capacity, we used to have around 250-260 horses at any given time, but today we have around 160.
“We are running into heavy losses and we may even have to foreclose.”
Sources say Mallya’s companies would infuse funds into the stud farm (URBBL is a separate entity from United Breweries, Mallya’s flagship company) and that is how it managed to survive. Another advantage was Mallya’s 1992 deal with the Karnataka government, which gave the farm the benefit of a 30-year lease.
B.R. Sharan Kumar, editor of Racingpulse.in, a leading website on horse racing, said the farm’s stallions had been doing well, but in the last few months, its existence has been “hand to mouth”.
“In the next few months, another 30 horses may be sold to maintain the farm. The situation has been quite bad — they might need to decide whether to shut it down or hand it over to another firm to continue the legacy,” Kumar said.
Also read: ‘Please take’ the money back, Vijay Mallya tells Indian banks
Blazing Saddles
Sources at the farm said at an auction last month, some of its best horses were bought by Blazing Saddles, a company promoted by former Uttarakhand chief minister Vijay Bahuguna’s son Saket, and represented by Niraj Tyagi and Vikas Sachdeva.
“They have many more horses to sell. As of today, because of the legal hassles, not many people have come forward to buy the horses. That is why Blazing Saddles seems to have the benefit of any horse it wants,” Kumar added.
A source at the farm said there could be a deal between Mallya and Blazing Saddles in the pipeline, but the URBBL has denied it.
“There is absolutely no truth in the statement that Blazing Saddles are keen to ‘ink a deal and have made a big offer’ either to buy the stud farm [which is simply not possible] or all the stock,” its statement read.
Vijay Mallya should return to India, without waiting for the inevitable extradition order. There should be no rush to send him to Arthur Road prison. He should sit with his bankers and work out a reasonable settlement. Many more are required to work through the existing mountain of NPAs. No justification for creating new sour loans by asking banks to relax prudential norms, whether it is through MUDRA, diluting PCA curbs or enhancing MSME disbursements. When political interventions displace commercial risk assessment, men like Vijay Mallya will hijack the system.