Kingfisher failed due to bad governance: Veerappa Moily

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MUMBAI: A day after he called for saving the ailing Kingfisher Airlines, Corporate Affairs Minister Veerappa Moily on Wednesday blamed bad governance and absence of professional management as the reasons for the perils of the carrier.

When sought his views on the current affairs at Kingfisher, Moily, without naming the airline, said the problems are due to bad governance practices0, but as the corporate affairs minister he wants that company to survive.

“Why health of a company failed, because of bad governance. You must have a professional management. You cant’ have individual decision-takers,” Moily told PTI.

“I want that company (Kingfisher) to survive. The government is always there but the major initiative should come from the person who has to provide that kind of atmosphere,” he said.

Moily was speaking at a corporate and investors meet organised by the Indian Merchants Chambers here.

Moily had yesterday said, “as a corporate affairs minister, we want corporate bodies to build and come up and not wound up…Something has to be done. He (Mallya) has to work out a strategy…The entrepreneur has to take proactive measures so that is acceptable to banks and others.”

Kingfisher, which has an outstanding debt of over Rs 13,000 crore, including over Rs 6,000 crore of accumulated losses since the inception seven years ago, had requested a consortium of 18 lenders led by SBI for additional lending, but banks are seeking fresh equity infusion by the promoter.

Moily said the National Competition Policy will be in place by March 31.

“The national competition policy has lots of benefits because all the monopolies and anti-competitive forces will have to be dismantled,” he said.

The competition policy by targeting cartelisation will go a long way in moderating prices, especially the food prices, the minister said.

Moily also informed that the committee constituted under Dhanendra Kumar had given its report and two national consultations had been held with all the stakeholders on the basis of the document.

On inflation, the minister observed that monetary policy measures alone will not be able to rein in price rise. Replying to a query on corporate governance, Moily emphasised the importance of good governance in public sphere and said it holds the key to sustainable development.

The minister said growth does not mean merely increasing turnover year after year, and observed that the corporates which have imbibed good governance have managed to survive the adverse conditions better.

Speaking about corporate social responsibility (CSR), Moily complemented the public sector units for whole-heartedly participating in the process and called upon the private sector too to join in.

He clarified that 2 percent contribution for CSR has not been made mandatory and reporting in the annual report about not contributing the same is compulsory.

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