MUMBAI: The Indian government has rejected the reappointment of liquor baron Vijay Mallya as head of his grounded and debt-laden Kingfisher Airlines, in yet another blow to the self-crowned “king of good times”.

Kingfisher, once India's second-largest airline by passenger share, is under growing pressure to repay debts of nearly $1.5 billion owed to a consortium of largely state-run banks.

The airline has not made a profit since Mallya founded it in 2005. Its fleet was grounded in 2012.

The company said the ministry of corporate affairs had rejected Mallya's application for reappointment, a move required under government regulations, without detailing why.

The ministry rejected the application “for reappointment of Vijay Mallya as managing director of the Company for a period of 5 years from October 16, 2013 without remuneration”, the airline said in a statement to the Bombay Stock Exchange (BSE) on Monday night.

The move was widely expected after Mallya was declared a “wilful defaulter” by one of his bankers in September, a term that makes it difficult for him to find new lenders.

Earlier Monday another firm, Mangalore Chemicals & Fertilisers, told the BSE that Mallya had resigned from its board. It gave no reasons.

The news lifted MCF shares sharply on the day. Kingfisher Airlines shares were suspended in November after stock exchange authorities demanded the carrier declare long-awaited financial results.

Mallya made his fortune through an inherited liquor business and branched out with Kingfisher Airlines, named after his top-selling beer which is an Indian household name.

But Mallya is struggling to retain control of his empire. Analysts says Kingfisher Airlines was a casualty of India's cut-throat fare wars in the congested sector.

The full-service Kingfisher, which boasted it treated flyers as “guests”, never returned to the skies after pilots went on strike in 2012 over unpaid wages.

He is still chairman of United Spirits, a key source of his riches, but has sold a large chunk to Diageo and handed over management control to the British beverage giant.