Air Deccan (2003) (Bengaluru International) founder GR Gopinath is under investigation in India for his alleged role in the bank fraud committed during the bankruptcy of Kingfisher Airlines (Mumbai International), The Economic Times has reported.
Gopinath sold his low-cost carrier Air Deccan to Kingfisher owner Vijay Mallya in 2007, subsequently assuming a board position at the latter airline. The airline was then rebranded as Kingfisher Red. The transaction included the transfer of a INR3.4 billion rupee (USD47.5 million) loan previously granted by the State Bank of India (SBI) to Air Deccan to Kingfisher Airlines.
The investigators believe that this could have played a role in a diversion of funds from the SBI. In February 2008, the bank disbursed a INR299.6 million rupee (USD4.2 million) tranche to Kingfisher Airline, which coincided with a payment of a INR300 million rupee fee by the airline to Gopinath.
The payment to Gopinath was not disclosed to the shareholders at that time and was already under investigation in 2017.
Kingfisher Airlines went bankrupt in October 2012. While Mallya said that it was purely a "business failure", the authorities have long suspected fraud. The airline founder, who has personal debts of INR90 billion rupees (USD1.25 billion) to various Indian banks, is hiding abroad and wanted in India for questioning on money laundering, criminal conspiracy, and fraud charges related to the collapse of Kingfisher.
Recently, the UK Home Secretary approved the request for extradition of Mallya to India.
Gopinath is no longer related to Air Deccan (DKN, Nashik), a regional carrier launched in 2017 to operate mostly under the government-funded UDAN programme. The new iteration of Air Deccan is currently grounded.
