Warrant issued for Vijay Mallya’s arrest in money laundering case
Mumbai: A special court on Monday issued a non-bailable warrant for the arrest of UB Group chairman Vijay Mallya, as investigators and creditors strive for the return of the embattled businessman from abroad.
A special court issued the warrant in response to a petition filed by the Enforcement Directorate (ED), alleging Mallya had siphoned off Rs.430 crore from an IDBI Bank Ltd loan to his Kingfisher Airlines Ltd to purchase properties overseas. UB Group denied the allegation.
ED, which investigates money-laundering cases and foreign exchange rule violations, will hand over the warrant to the ministry of external affairs, which in turn will send it to a local magistrate in the UK, said ED counsel Hiten Venegaonkar.
“Now, it will take maximum 15 to 20 days to get Mallya back to India,” Venegaonkar said.
Mallya, whose grounded Kingfisher Airlines owes in excess of Rs.9,000 crore to a consortium of lenders led by State Bank of India (SBI), flew abroad on 2 March, most probably to the UK, attorney general Mukul Rohatgi told the Supreme Court on 8 March.
Last week, the government suspended his passport on a request by the ED. The foreign ministry said on 15 April that Mallya had a week to explain why his passport shouldn’t be impounded or revoked, after suspending it for a month.
Mallya, 60, flew out of India days before creditors moved the apex court to restrain him from leaving India and sought an arrest warrant against the businessman. The special PMLA (Prevention of Money Laundering Act) court rejected a plea by Mallya’s Kingfisher Airlines challenging the ED claim.
Kingfisher Airlines can challenge the warrant of arrest against Mallya in a high court.
“The allegation made by the Enforcement Directorate before the PMLA Court that they have stumbled upon evidence that Rs.430 crores was transferred overseas for property acquisition is strenuously denied,” UB Group said in a statement.
“The audited accounts of Kingfisher Airlines including for the year ended 31.3.2010 show all foreign exchange transactions which includes funds borrowed from IDBI Bank (were) used for legitimate business purposes only,” the statement said.
“We are shocked at the allegation made by the Enforcement Department before the PMLA Court for the very first time. Multiple investigations have been going on since July 2015 and this allegation has never been made. In order to explain foreign exchange remittances all of which have been fully accounted for, we will provide full details in the next few days,” the statement said.
“Suffice it to say that the basis of seeking a Non Bailable Warrant against our Chairman is erroneous and unjustified,” it added.
ED told the special court that the Rs.430 crore was part of aRs.950 crore loan taken from IDBI Bank. ED has been probing suspected wrongdoing in the grant of the loan.
Counsel Venegaonkar told the PMLA court that Mallya siphoned off the money under heads such as payments for aircraft lease rentals, import of spare parts and aircraft maintenance services.
Experts are divided on whether the actions taken by government agencies will be sufficient to secure Mallya’s return to India.
“This is a serious issue for Mallya. Of course, this means that Mallya will now not return to India. But these actions by the Enforcement Directorate and the courts are coming too late,” said Shriram Subramanian, founder of InGovern Research Services, a proxy advisory firm.
Mallya has not heeded three ED summons ordering him to appear before it personally. He has sought time until May for appearing in person.
Arun Kejriwal, director of Kejriwal Research and Investment Services Pvt. Ltd, said the whole country believes that the promoter of UB Group needs to come clean and engage in a dialogue with lenders.
“Currently, he seems to be playing delaying tactics. This non-bailable warrant will force him to come to the negotiating table,” Kejriwal said.
Earlier this month, the lenders’ consortium spurned Mallya’s offer to repay Rs.4,000 crore to settle the debts of Kingfisher Airlines. He also offered to pay an additionalRs.2,000 crore if he wins a pending lawsuit against an aircraft engine maker.
SBI, which has the biggest loan exposure to Kingfisher Airlines at Rs.1,600 crore, and 12 other banks moved against Mallya days after Diageo Plc. promised him a $75 million payout. SBI declared Mallya a wilful defaulter in November.
On 25 February, Diageo agreed to pay Mallya the money over five years and drop all charges of financial impropriety against him in return for stepping down as chairman of United Spirits Ltd, a company now controlled by the UK liquor maker.
News Source: Live Mint