Flying blind

AN OWNER who is lying low in London, a slew of government agencies investigating fraud, a consortium of 17 banks facing hefty losses: winding up Kingfisher Airlines, an Indian carrier that stopped flying in 2012 under a pile of debts, always looked likely to make the fortunes of a few bankruptcy lawyers. It now seems that forensic accountants may get a fat payday as well, after the airline told a government agency its books had vanished. As with all important documents, it seems, a backup is nowhere to be found, if it ever existed.

The airline’s missing accounts—apparently stored on servers seized by a vendor who had gone unpaid—is an unwelcome complication for those who had hoped the Kingfisher saga might be inching towards some sort of resolution. To the dismay of Vijay Mallya, the booze scion who founded the airline in 2005 (pictured left, with Prince Charles), the case is now a tangle of bankers’ civil claims and criminal ones from authorities investigating allegations that some of the loan money went towards his foreign property purchases (accusations that Mr Mallya says he has disproved).

Every week brings fresh news of financial slapstick. Last month it emerged that one of the aggrieved banks froze the accounts of three customers it alleged had guaranteed loans to the carrier in their role as board directors of Kingfisher. In fact, it blocked a destitute farmer, a vegetable stallholder and a security guard with similar names. The actual targets deny being on the hook anyway.

Mr Mallya, who did in fact personally guarantee the loans, has claimed it was coincidence that he flew to Europe just as government agencies were closing in on him in March. He says proceedings designed formally to brand him an absconder make it harder for him to settle with the banks, many of which are state-owned. Having insisted he cough up the entire 90 billion rupees ($1.3 billion) he owes, including overdue interest, there are now reports that some banks may be happy if they get little more than their principal back.

That would still equate to a recovery rate of over 50 cents on the dollar, more than double the Indian average in such bankruptcy cases. But the banks’ fear of appearing soft on a hard-partying tycoon will make it difficult for them to settle. They must be seen to hold him to account—a task now made all the trickier by Kingfisher’s own missing accounts.