Too many articles have come out decrying the order by the Government to merge FT and NSEL. They all quote the same thing – FT was just an investor and therefore it should not bear any liability greater than the amount of money they invested into it. It’s against the concept of limited liability. I would have believed this if there was no five letter word “Fraud” involved.
For instance, I think that it’s perfectly fine that Vijay Mallya can spend his personal money while Kingfisher owes lots of money to banks. Because his personal liability is different from that of the company. He is not required to pay back the company’s debt. Of course, he could be, if any of two things happen:
- If Mallya has fraudulently embezzled Kingfisher funds or conspired with it to fraud someone else, it would not be an overreach to use this information to demand that he pay back such loans […]