Vijay Mallya is on time. The Indian tycoon — branded a “fugitive from justice” by Prime Minister Narendra Modi’s government — arrives at suite number 111 at the Dorchester Hotel, Mayfair, wearing a pinstripe suit and a flowery Parisian tie, his grey mane pulled into a ponytail. A diamond ear stud shimmers. It is just a few minutes past 2pm, the time of our appointment with the tycoon who has become, in his own words, a “poster child” for the bad loans weighing down India’s state-dominated banking system.

Mallya’s punctuality is in contrast to the days when he reigned over India’s biggest alcoholic beverage companies and its most popular airline, and, notoriously, made people wait for hours to see him. In his heyday, he was late to his own press conferences. Executives of his flagship companies — United Spirits, United Breweries and Kingfisher Airlines — were kept waiting for afternoon business meetings that finally started at midnight. Later, it was his creditors that Mallya infuriated with his tardiness, as cash flow problems mounted at the airline.

But times are different. Mallya lives in London in what he calls “forced exile” from India, where he is now a reviled figure, accused of bilking state banks by failing to repay £900m in debts, and accumulated interest, left by the October 2012 collapse of Kingfisher Airlines. Indian authorities have cancelled his passport. In April, a court issued a warrant for his arrest, as criminal investigators seek to interrogate him over what happened to a £90m loan from the state-owned IDBI Bank, extended to Kingfisher Airlines in 2009, when the carrier was already in trouble.

The once high-flying businessman — popularly known as India’s “king of good times” after the slogan emblazoned on the label of bottles of his successful Kingfisher Premium beer — is now effectively grounded in the United Kingdom. New Delhi has written to the British government seeking his deportation. In Mumbai this month, Indian tax authorities are auctioning his luxurious private jet — which has his initials, VJM, painted in gold on the engines and wingtips and embossed on the leather seats — in lieu of unpaid taxes. “The media made me into the king of good times, and now I’m the king of bad times,” he says in a gravelly voice.

The question exercising many in India’s emerging middle class — as well as the government of the famously ascetic Modi — is just how Mallya manages to live in splendid luxury while failing to repay taxpayer-funded banks for the money his defunct carrier owes, loans that he personally guaranteed. As quickly becomes clear, Mallya, who says he himself lost some £600m in the airline, is unrepentant.

“One of the businesses I was involved in failed, sadly,” he says, exhaling smoke from one of the many thin cigarillos he will smoke over the course of a four-hour discussion. “There were other businesses that still exist, which are hugely successful. Should I, therefore, be a hypocrite? Because one of these businesses failed, should I live my life differently? It is what it is. I am not a hypocrite.”

Vijay Mallya announces he will buy 50 Airbus planes for Kingfisher at the Paris International Air Show, June 2007 © Bloomberg

In many ways, the rise and fall of Vijay Mallya is a parable of modern India. Like many in India’s business elite, the tycoon made a big bet a decade ago, when India’s economy was expanding by more than 9 per cent a year and boosters spoke of the subcontinent overtaking China. But then came the 2007-08 global financial crisis, and domestic policy paralysis. Many Indian companies — especially family-owned businesses, with fuzzy distinctions between company assets and controlling shareholders — ran into severe financial difficulties.

Kingfisher, which at its peak carried nearly a quarter of India’s domestic air travellers on a fleet of some 70 planes, is not India’s biggest debt defaulter. But Mallya — a businessman who embodied the aspirations of his country’s restless youth for a more comfortable, dignified life yet acted with the arrogance typical of its phenomenally rich, unaccountable elite — is the most visible of India’s troubled tycoons.

Now, Mallya is in the sights of Modi, who swept to power in 2014 vowing to reinvigorate India’s economy and to reclaim corrupt “black money” hidden overseas. Raghuram Rajan, the central bank governor, and Arun Jaitley, the finance minister, are determined to clean up the banking system weighed down by bad loans. And all three men seem inclined to make an example of the erstwhile king of good times — and demonstrate they can hold rich debt defaulters to account.

Vijay Mallya’s 51st birthday party, aboard the Indian Empress superyacht, 2007 © Peter Dench

“I am a small fry,” Mallya says, chuckling, his ruby-studded cufflinks and monogrammed cuffs visible from under his suit. “But I’m the big fish that people want to catch — that’s the trouble.”

The current national frenzy over Mallya began when he held a lavish two-day 60th birthday party for hundreds of guests at Kingfisher Villa, a huge beachfront bungalow in Goa, in December. Spanish pop star Enrique Iglesias was flown in to perform. A few weeks later, Rajan spoke out.

“If you flaunt your birthday bashes even while owing the system a lot of money, it does seem to suggest to the public that you don’t care,” the central bank governor told an Indian TV channel. “I think that is the wrong message to send. If you are in trouble, you should be cutting down on your expenses.” Mallya was not explicitly named, but the inference was clear.

Kingfisher Villa, the beachfront bungalow in Goa

Until then, Indian banks had seemed resigned to a protracted legal battle to collect repayment. Mallya, a “non-resident Indian” who, until his resignation last week, was a nominated member of India’s upper house of parliament, came and went as he pleased. Then in February, Diageo, the British drinks company that took control of Mallya’s United Spirits in 2014, announced that it was paying Mallya, who had remained chairman of US even after the acquisition, $75m to sever his working relationship with the company. News of the pay-off galvanised Kingfisher’s creditors, who vowed to lay their hands on the money and sought to bar the businessman from travelling abroad. By the time they petitioned the court, however, Mallya had already returned to the United Kingdom, where he has permanent residency and owns a London apartment, an office and a large country home in Hertfordshire.

India’s febrile TV channels recounted his “flight” to the UK; anchors stridently called for punishment of those responsible for his “escape”. Finance minister Jaitley, accusing Mallya of giving entrepreneurs a “terrible name”, vowed banks would recover “every penny”. At a rally in Assam last month, Modi declared his government had “tightened the screws” on debt defaulters, whom he described as “sweating due to fear of going to jail and fleeing”.

Reading the popular and political mood, India’s normally sluggish state agencies swung into action. “The media — the electronic media, in particular — has made such a big show of me that I guess all constituents in government needed to then respond by being seen to do something,” says Mallya, sipping tea from a porcelain teacup. “Television channels are saying I stole £900m and ran away from India. How ludicrous can that be!”

Mallya arrives at a Kingfisher Airlines news conference, Mumbai, November 2011 © Bloomberg

It’s not the first time Mallya has appeared indifferent to the effects of his actions. Both before and after the Kingfisher collapse, he was fiercely criticised by employees and in the media for jetting to global sporting events and parties, while failing to pay thousands of Kingfisher employees, who had worked without salaries for months in the hope that the tycoon would manage to keep the cash-strapped airline aloft. It was disgruntled unpaid engineers who finally grounded the carrier, refusing to certify the planes as safe to fly.

Yet at the Dorchester, the businessman scoffs at the suggestion that he misread the current mood in India. “People are saying we shouldn’t have this lifestyle, I shouldn’t have my birthday party. But what did I spend on my birthday party?” he asks rhetorically. “My birthday party and what was spent on it wouldn’t even move the needle.”

The collapse of Kingfisher Airlines was a turn of fortune for Mallya, who had previously been celebrated for expanding companies inherited from his father into lucrative behemoths, whose commanding positions in India’s small but fast-growing market made them coveted prizes for the world’s biggest alcoholic beverage groups. Yet in a puritanical country — where alcohol consumption is still regarded by many as a sin and highly regulated, and where wealthy businessmen usually keep a low profile — Mallya was always a soft target.

The Indian Empress superyacht

Indians had long been bombarded with images of him at matches of the Indian Premier League cricket team bought by United Spirits in 2008; or in the pits at the car races of his Formula One team; or partying with stars of Bollywood and surrounded by scantily clad models at the annual release of Kingfisher’s swimsuit calendar.

Mallya was renowned for holding booze-fuelled New Year’s Eve parties at his Goa villa, attended by a Who’s Who of Indian business and society. As he mingled with his guests, he was followed closely by attendants bearing his phones, drinks and cigars on silver trays. He also held annual parties aboard one of the world’s largest luxury yachts, the Indian Empress, at the Monte Carlo Grand Prix.

“The biggest problem with Vijay Mallya has always been his profile,” says one Mumbai-based businessman. “People love to hate him. Everyone wants to be like him, and when they cannot be like him, they just hate him.”

Today, as he lights another cigarillo in the peaceful luxury of the Dorchester, Mallya insists his image as a party-boy surrounded by nubile women was just a marketing strategy for Kingfisher Beer, designed to circumvent India’s ban on advertising alcohol. And it is true that, even before this crisis, in person at small gatherings he had always been a more subdued, and sharper, personality than his image — and fondness for bling — would suggest.

“This business of being a high-roller is bollocks,” he says angrily. “It’s nonsense — a figment of everybody’s imagination. I am a very private, simple guy. People are completely swayed and influenced by the professional side of me which is misunderstood to be my personal side.”

Mallya in Glasgow, May 2007, after paying £595m for Whyte & Mackay whisky © AFP

His sonorous voice grows more forceful. “Every time my name comes up, it’s me with a whole bunch of pretty girls and models,” he says. “Hey, let me tell you why! I am brand ambassador for my Kingfisher in a media dark environment. The reason why I endorsed my own brand was because I wanted to create an aspirational value around the brand identity and the brand image.

“What is the most aspirational part of anybody’s life?” he continues. “Lifestyle! Women, fancy cars, aeroplanes. It’s all aspirational. All this was brought into play in creating a brand identity and brand personality of Kingfisher. It all got lumped on me.” And then, he gives a hint — barely — of regret. “Maybe I should have never have gone down this route at all, in hindsight,” he says. “I am sometimes a victim of my own image. But I can’t do very much about it, can I?”

As we speak, two phones, sitting in front of Mallya, beep and ring incessantly, with incoming text messages, emails and calls. One bursts into the Kingfisher beer jingle. It’s a call from Jean Todt, president of the Fédération Internationale de l’Automobile, which oversees motorsport. Mallya says he also hears often from other Indian tycoons, anxious that the onslaught against him is a precursor of a wider offensive against indebted businessmen. “I get calls from people in India every day saying, ‘Oh my God, what if this happens to us?” he says.

Mallya’s career began in earnest in 1983, when he was just 27 years old and his entrepreneur father Vittal Mallya died of a heart attack at a party. The elder Mallya had ventured into India’s alcoholic beverage market in 1947, buying a century-old British beer company with five breweries in southern India, just as India won independence from British colonial rule. In the 1950s, Vittal moved into spirits, acquiring McDowell’s, a British-owned whisky importer, before setting up his own distillery. His canniest move came in 1977, when Prime Minister Morarji Desai — who drank his own urine and publicly touted its health benefits — pledged to impose total prohibition in India by 1981. Vittal bought up Indian distilleries and breweries from their panicked owners at bargain-basement prices. In 1979, just two years later, Desai was ousted, and the prohibition threat receded.

Mallya became chairman of the company on his father’s death, and began acquiring smaller rivals and new distilleries, introducing new products, and forging joint ventures. In 1978, at the age of 23, he had launched Kingfisher Premium beer, inspired by a defunct colonial brand whose label was buried in United Breweries archives. “It was a nice name — colourful, exciting, vibrant — and I built the brand around those core values,” he says.

With Kingfisher calendar models, Mumbai, December 2006 © Reuters

Alcohol isn’t an easy business in India. Mahatma Gandhi, the father of Indian independence, was a strict teetotaller; the constitution has a “directive principle” committing the government to seek prohibition. Alcohol sales are regulated by individual states, which sell beer and spirits at government outlets at controlled prices, with the highest taxes of any industry in India. There are also inefficiencies of scale: spirits produced in one state usually can’t be sold in another. United Spirits is said by company insiders to require 200,000 separate permits to operate each year.

Mallya worked the unwieldy system adeptly, establishing apparently unassailable dominance of the market. By 2005, when the UB Group swallowed its last large rival, Shaw Wallace, he had control of half of India’s whisky and rum market. United Breweries, led by Kingfisher beer, sold more than half the beer drunk in India. Growth was buoyant. Between 2001 and 2006, India’s alcoholic beverage market expanded 29 per cent, with sales volumes of whisky and beer increasing 50 per cent and 49 per cent respectively. For Mallya, these were indeed good times.

It was against this backdrop that Mallya launched Kingfisher Airlines — hoping to transform the flying experience in India with a luxurious “five-star” carrier that would bring the romance and glamour of early aviation to India, where millions were taking to the skies for the first time. In India, air travel was considered a luxury — transportation for the privileged — rather than a basic service in a modern economy. Subject to punitive taxes, especially on jet fuel, aviation was dominated by utilitarian carriers, including the former state monopoly carrier and a clutch of no-frills start-ups.

At the Royal Challengers Bangalore IPL match, October 2009 © Getty

Mallya and the UB Group were based in Bangalore, an IT hub drawing talented engineers from across India, and Mallya fervently believed in aviation’s growth potential. “He used to say, ‘If someone gets a job interview in Bangalore and lives in Guwahati [2,800km away], are they going to take a train?’” recalls one aide.

He launched his carrier with great fanfare — and a lavish party — in May 2005, on the 18th birthday of his son Siddharth. Mallya was confident he could win over Indian travellers with a taste of the good life he himself so visibly enjoyed. “His thought was, ‘I’ll make you feel like a king,’” says one aviation industry analyst.

On Kingfisher Airlines, travellers — referred to as “guests” — were met at airport kerbs by valets, who carried their luggage to check-in desks. Passengers on short-haul economy flights got hot meals and personal entertainment systems. “Each member of your cabin crew has been handpicked by me,” Mallya purred in the Kingfisher welcome video, still visible on YouTube. “And I have instructed them to treat you as guests in my own home.”

Travellers loved it — by 2008, Kingfisher was carrying more than 25 per cent of India’s domestic fliers. But Mallya wanted Kingfisher to fly abroad. However, months before the launch of Kingfisher, New Delhi had instituted a requirement that Indian airlines had to have been flying for five years, and have a fleet of 20 planes, before they could operate international fights.

This rule — still in force today — is fiercely criticised by aviation professionals and start-up carriers as being designed chiefly to protect incumbent carriers. In any case, Mallya circumvented it. In June 2007, his United Breweries Holdings spent £40m to buy Air Deccan, a four-year-old no-frills carrier, which was a sensation in India for selling tickets for as little as Rs1. It was on the verge of collapse — but just a year away from flying abroad.

Today, many aviation analysts believe the acquisition of Deccan — which had accumulated huge losses — was Mallya’s fatal mis-step. “This was the biggest mistake,” says Neelam Mathews, a journalist with Aviation Week. “He was running a five-star airline, and then he bought a low-cost airline. But he could not think low cost. For him, everything had to be the greatest.”

© Charlie Bibby

That same year, global oil prices began their surge — a headache that in India was magnified by jet fuel taxes of 25 to 30 per cent. As India’s largest domestic carrier, Kingfisher was the hardest hit.

“I don’t think anybody — not even the most respected analyst — expected crude oil to go to $140 per barrel,” Mallya tells us.

At the same time, Mallya was engrossed with other things. In May 2007, United Spirits had purchased Whyte & Mackay, the world’s fourth-largest Scotch producer, for £595m, securing a source of real Scotch for his Indian whisky blends. That year he also spent $110m to buy a Dutch Formula One team, Spyker, renaming it Force India. As he recalls the purchase, his voice rises with excitement, tinged by a hint of defensiveness.

“I’ve always loved championing the cause of my country,” he says. “India’s young demographic love motorsports but never thought they would have an Indian team on a Formula One grid. Too expensive. Too high-tech. ‘We poor Indians can never afford it.’ For the first time in history, I put an Indian Formula One team on the world championship grid. I named it Force India. I could have named it Mallya . . . but I didn’t.” In January 2008, United Spirits paid $111m for a team in the nascent Indian Premier League, a cricket tournament akin to a 44-day-long travelling circus.

Public protests against Mallya, New Delhi, March 2016 © Hindustan Times

An ardent cricket fan and car-racing enthusiast, Mallya attended nearly every match and race of his new teams. Yet he angrily rejects the idea that these pastimes distracted him from his airline’s deepening crisis. “If a company under my command owns a team, why wouldn’t I show up?” he says, indignantly. Known for taking an active role, he insists he had the “best professionals” running his businesses. “It wasn’t just a one-man band,” he says.

Company insiders, on the other hand, say executives were terrified to bring bad news to Mallya’s attention. “He was like a master — he walked like a king,” says one industry analyst. “Who was going to say ‘Sir, this is an issue?’” By 2009, Kingfisher Airlines’ cash flow situation was dire and Mallya insisted on approving every cheque. “Every payment had to be cleared by him,” says an aide.

In 2010, under a special Reserve Bank of India scheme, Kingfisher’s estimated $1.5bn in debts were restructured. Lenders converted $194m of debt into a 23 per cent equity stake into the carrier — at a per-share price that was 61 per cent higher than the prevailing price. Mallya personally guaranteed Kingfisher’s loans. But, hurt by an industry fare war and the sharp depreciation of the Indian currency, the airline — which had never turned a profit — continued to bleed.

Because one business failed, should I live my life differently? It is what it is. I am not a hypocrite

Mallya begged the Congress government to reduce jet fuel taxes, or liberalise aviation to permit foreign airlines to take stakes in Indian carriers. “I pleaded and pleaded with them,” he says. “I had already agreed a deal with a foreign airline.” But his efforts came to nought. Kingfisher was finally grounded in October 2012, when staff who had been unpaid for seven months walked off the job. Weeks later, New Delhi announced it would allow foreign airlines to buy stakes in Indian carriers. Jet Airlines, which was also teetering on the financial brink, sold a 24 per cent stake for $380m to UAE airline Etihad. But it was too late for Kingfisher.

Today Mallya, confronted with unpalatable choices, cuts a dejected figure. He faces the prospect of either digging deep in his pockets to settle with his lenders, or possibly, never returning to India. In 2013, he filed a Bombay High Court lawsuit claiming the personal guarantees he had given during the 2010 debt restructuring were extracted under duress, when State Bank of India threatened to pull out of the deal on the last day. “After all the work that went in behind it, dispensations from the Reserve Bank of India and all the rest of it, letting it all go on the last day was no option,” he says.

The battle over the validity of these guarantees — and just how far they should extend — is at the heart of the acrimony between Mallya and the banks. “No guarantee is unlimited,” the tycoon says, noting that banks had, at the time, valued his guarantee at about £136m. Shuffling through a sheaf of documents, he reads from an RBI circular: “Personal guarantees . . . should bear reasonable proportion to the estimated worth of the person.”

Nevertheless, Mallya has, he says, recently offered £440m to the banks, calling it a good deal, given that the original loans were just over £500m. Banks have rejected the offer. Mallya must now decide whether to sweeten it, possibly by selling some of his remaining assets, such as his 30 per cent stake in United Breweries, worth about $1bn.

Mallya also faces potential criminal charges, as Indian investigators probe whether he diverted funds from an IDBI loan of £90m to Kingfisher to buy assets abroad. Investigators told an anti-money laundering court that they believe he did — though they say they are still trying to figure out what he bought, and have yet to file any formal criminal charges. Mallya angrily rejects the allegations.

Mallya's son Siddharth, an actor, with Bollywood star Deepika Padukone, Mumbai, August 2010 © AFP

“Zero! Nil! Never,” he declares forcefully, when asked point blank if he ever diverted money from his companies for personal use. “I would invite anybody to appoint the most competent forensic accountant in the world and I can guarantee they are going to find nothing. It’s an open offer.”

In a recent affidavit to the Supreme Court, Mallya said his overseas assets — and those of his estranged wife and three grown children, all US citizens — are together worth $114m. The Indian media, attempting to assess his worth, have reported that he has an apartment in Trump Tower in New York but Mallya is outraged at the misrepresentation. “I have six,” he has said, though some are in his daughter’s name. But, he insists, “the sources of funds for the apartments can all be accounted for”.

When Diageo announced its severance package, it was revealed that Mallya’s properties (the Goa villa, a sea-facing bungalow in Mumbai, a house in Delhi and 10 other residences in India) are not in fact his; rather, they are owned by United Spirits, which now plans to sell them. Mallya has the first right to buy them, though this could be complicated by his current situation.

While Mallya describes himself as a workaholic, his work obligations are diminishing. A month after Kingfisher’s collapse, he sold United Spirits — “the family jewels” as he described it to the FT in 2012. The sale was spurred, he says now, by his son’s disinterest in ever taking over the company, a personal blow to the tycoon who had to confront the end of the dynasty founded by the father he revered.

“My son’s not interested,” Mallya says. “He wants to focus on his acting career. Unfortunately, there is nothing I can do to help him along with that. A career in acting is very personal.” As part of his recent severance deal with Diageo, Mallya has also signed a global non-compete agreement, preventing him from starting any new alcoholic beverage business. He remains principal and manager of his Force India team — which he describes as his “job” — but travelling to races around the world could be tricky without a valid passport.

For now, he says, he is leading a “simple life”, exercising every morning before work and keeping company with his four dogs — two golden retrievers, Luna and Bella, and two fluffy Bichon lapdogs, Elsa and Daisy. He spends most of his days at his London office, attempting to grapple with the fast-moving situation and his creditors. “If the banks are settled everything else falls away,” he says. He rarely goes to parties, he claims, but will have a drink in the evening: two measures of spirit, and then either a French red wine if he’s with friends, or a Californian Merlot when he is alone.

Despite his repeated protestations that he wants to settle with the banks, Mallya gives no hint of being willing to make a better offer, and seems resigned to the possibility of long exile from India. “I would definitely love to go back to India,” he says flatly. “But, if the government makes circumstances where it is impossible for me to go and get justice, then I just have to make do with what I have.

“No more dreaming big,” he sighs.

Mallya accompanies us down to the foyer of the hotel. A doorman snaps to attention and opens the swing doors. A silver luxury Maybach stands waiting. Vijay Mallya slips into the back seat. Our last glimpse of the fallen tycoon is his personalised licence plate: VJM-1. A snapshot of defiance and insouciance in the face of adversity.

Amy Kazmin is the FT’s new South Asia bureau chief. Lionel Barber is editor of the FT

Portraits by Charlie Bibby

Photographs: Peter Dench/Getty; Bloomberg; AFP; Getty Images; Hindustan Times; Reuters; YouTube

This article has been amended since publication. Prime Minister Morarji Desai drank his own urine and not cow urine.

Letter in response to this article

Lack of intervention on Kingfisher damaged India / From Ranjit K Bhandari