Vijay Mallya To Be Labelled ‘Fugitive’, ED Prepares A New Chargesheet

The Logical Indian Crew

June 18th, 2018 / 1:34 PM

Image Credit: Patrika

The Enforcement Directorate has decided to file yet another chargesheet against Vijay Mallya and his companies for money laundering and allegedly cheating a consortium of nationalised banks off Rs. 6,027 crore. Last month, the UK High Court refused to overturn a worldwide freezing order and ordered Mallya to pay a minimum of 200,000 pounds (Rs 1.8 crore) towards the legal costs incurred by 13 Indian banks.

NDTV reported that official sources had told PTI that with the chargesheet (also known as the prosecution complaint) the central probe agency will seek permission from the court to “confiscate” assets of the liquor baron-turned-fugitive in the tune of over Rs 9000 crore under the newly formed Fugitive Economic Offenders Ordinance.

Last year, ED filed the first chargesheet against Vijay Mallya for the Rs. 9000 crore IDBI bank-Kingfisher Airlines (KFA) alleged bank loan fraud case. It has attached assets worth Rs. 9,890 crore in this case till now. Mallya’s lawyers say that all the allegations against Mallya are baseless and politically motivated. They are also challenging the case on human rights grounds citing the condition of the Arthur Road Jail in Mumbai where the business tycoon would be held after extradition. 


New Chargesheet

The new chargesheet will be filed after the State Bank of India (SBI), on behalf of a consortium of banks, complained that Mallya was behind on loan repayment he took during 2005-2010 causing a loss of Rs 6,027 crore.

It was alleged that SBI and its consortium banks had advanced various credit facilities to KFA Limited during the period between 2005 and 2010. During 2009-10, the company failed to meet its repayment commitments to the bank and the airlines did not keep its account with the consortium banks which became NPA (non-performing asset), the CBI complaint had stated.

The consortium banks, therefore, recalled credit facilities and also invoked corporate guarantee of UBHL (United Breweries Holdings Limited) and Mr. Mallya’s personal guarantee, it had alleged.

In the expected chargesheet it is to be mentioned that a maze of shell or dummy firms were used to allegedly siphon off money. On the basis of the charge sheet and the newly formed Fugitive law, the Indian government is planning to officially term Mallya a “fugitive”.


UK Court Order

Refusing to overturn a worldwide order freezing Mallya’s assets, last month, Judge Andrew Henshaw upheld an Indian court’s ruling that a consortium of 13 Indian banks led by the SBI was entitled to recover funds amounting to nearly 1.145 billion pounds, reported Firstpost.

“The court ordered that Mallya pay the banks costs. The standard order is that the court will assess those costs unless the parties can otherwise agree to a figure for what should be paid, said a legal expert familiar with the case.” The consortium of 13 Indian banks — State Bank of India, Bank of Baroda, Corporation Bank, Federal Bank Ltd, IDBI Bank, Indian Overseas Bank, Jammu and Kashmir Bank, Punjab and Sind Bank, Punjab National Bank, State Bank of Mysore, UCO Bank, United Bank of India and JM Financial Asset Reconstruction Co. Pvt Ltd — were entitled to recover funds amounting to nearly 1.145 billion pounds.

Next month, Mallya is due in a Westminster Magistrates Court in London for one of the final hearings in his extradition case.


Fugitive Economic Offenders Bill

The Fugitive Economic Offenders Bill was introduced in the parliament on March 12, but due to logjam it was not taken up. An ordinance was proposed. On April 21, the Union cabinet approved the ordinance and the President gave his assent.

The ordinance makes provisions for special courts under the Prevention of Money Laundering Act, 2002 to declare a person as a fugitive economic offender and order immediate confiscation of assets.

“A Fugitive Economic Offender is a person against whom an arrest warrant has been issued in respect of a scheduled offense and who has left India so as to avoid criminal prosecution, or being abroad, refuses to return to India to face criminal prosecution,” the government said.

Cases of loan fraud, cheque dishonour above Rs 100 crore will come under this bill.  


Contributors

Written by : Poorbita Bagchi

Edited by : Abhinav Joshi

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