ED Recovers ₹300 Crore to Clear Pending Kingfisher Staff Dues
Enforcement Directorate (ED) has successfully restored assets worth over ₹300 crore specifically earmarked for the former employees of the defunct Kingfisher Airlines (KFA).
This move comes more than a decade after the airline, once owned by fugitive businessman Vijay Mallya, collapsed under a mountain of debt, leaving thousands of workers without salaries, severance, or provident fund contributions.
The recovery is part of a broader liquidation process overseen by the Special PMLA (Prevention of Money Laundering Act) Court, which has been systematically liquidating Mallya’s seized assets to repay creditors and stakeholders.
A Decade of Kingfisher Staff’s Legal Battle for Arrears
When Kingfisher Airlines ceased operations in October 2012, it left behind a trail of unpaid dues.
While the headlines often focused on the ₹9,000 crore owed to a consortium of banks led by the State Bank of India (SBI), nearly 3,000 employees were left in financial ruin.
Many staff members were owed between six to ten months of back pay.
The ED’s recent action follows a direct mandate to prioritize the “human cost” of the corporate collapse.
By liquidating specific shares and properties originally attached under money laundering charges, the agency has secured the liquidity necessary to clear a significant portion of the outstanding labor dues.
Kingfisher Asset Liquidation and the Role of the Recovery Officer
The restoration process involved a complex coordination between the ED, the Debt Recovery Tribunal (DRT), and the Official Liquidator.
The funds were generated through the sale of high-value pledged shares in companies like United Breweries Holdings Ltd (UBHL) and United Spirits Ltd (USL).
A recent Special PMLA Court order restored these assets to the banking consortium.
The ruling specifically mandates that the liquidator receives over ₹300 crore to settle long-pending employee claims.
This ensures that the employees are treated as “secured creditors” under the law, giving them a priority claim alongside the lending banks.
Breakdown of the Payout
The ₹300 crore fund is expected to cover:
- Unpaid Salaries: Back wages for pilots, cabin crew, ground staff, and engineers.
- Provident Fund (PF) & Gratuity: Years of withheld statutory contributions that had left employees without a safety net.
- Notice Pay: Compensatory pay for the sudden termination of services when the airline’s license was suspended.
According to sources within the liquidator’s office, the verification of employee records is currently in its final stages.
Official payments will be made via direct bank transfer to former employees.
Before this happens, the liquidator must reconcile each ‘Form 63’ claim against historical payroll records.
The Wider Crackdown on Fugitive Economic Offenders
This recovery serves as a stern message to fugitive economic offenders.
To date, the Enforcement Directorate has attached assets totaling more than ₹19,000 crore.
This massive recovery spans the combined cases of Vijay Mallya, Nirav Modi, and Mehul Choksi.
Out of this, assets worth nearly ₹15,000 crore have already been handed over to public sector banks and the government.
Vijay Mallya remains in the United Kingdom as he continues to contest his extradition to India.
Meanwhile, the Indian judicial system has utilized the ‘Fugitive Economic Offenders Act’ to confiscate and liquidate his properties in his absence.
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