The Enforcement Directorate on Saturday attached assets worth over Rs 6,600 crore belonging to the beleaguered liquor baron Vijay Mallya in connection with its money laundering probe into the Kingfisher airlines loan default case. The agency has seized Mallya’s farmhouse, flats and fixed deposits apart from certain other liquid assets.
The ED has recently expanded its probe into the case as it took over investigation into the alleged loan default of Rs 6,027 crore availed from a consortium of nationalised banks led by SBI, in which a fresh case was filed by CBI last month. It had first began investigations on the Rs 750 crore loan default complaint of IDBI Bank.
The ED had previously attached assets worth Rs 1,411 crore. With latest attachment, the value of total attachments in the loan default case against Mallya has now reached Rs 8,041 crore.
The provisional attachment order, issued under the provisions of the Prevention of Money Laundering Act (PMLA), asked for seizure of a farm house in Mandwa in Alibaugh worth Rs 25 crore, multiple flats in Kingfisher tower in Bengaluru worth Rs 565 crore, fixed deposits of Mallya with a private bank to the tune of Rs 10 crore and shares of USL, United Breweries Limited and Mcdowell Holding company, jointly held by the liquor baron and UBHL and his controlled entities, worth Rs 3,635 crore.
“The total attachment under today’s (Saturday) order is worth Rs 4,234.84 crore but the present market value of these properties and assets is Rs 6,630 crore approximately,” the agency’s order said.
The agency alleged these assets were the “proceeds generated out of criminal activity” of the alleged default of bank loans as it claimed Mallya “criminally conspired” with Kingfisher Airlines (KFA) and United Breweries Holdings Limited to obtain funds through the consortium of banks and out of this total amount, the principal fund of Rs 4,930.34 crore “still remains unpaid.”
“In addition, huge number of shares were also being held in the name of various other group companies controlled directly or indirectly by Mallya. Hence, it appeared that even though sufficient funds were available with the promoters of KFA — Mallya and UBHL — they had no intention to make payment towards the bank loans from the consortium banks,” said the provisional attachment order.
“They deliberately and intentionally kept the huge number of shares approximately worth Rs 3,600 crore pledged with UTI Investment Advisory Services Ltd and other financial institutions without substantial underlying liabilities and thus kept the consortium in dark,” said the order.
In a statement ED said, “The investigation by ED revealed that huge funds (more than Rs 3,500 crore) out of these loans were remitted outside India on pretext of payments of lease rentals/ repair and maintenance etc but they failed to provide proper lease agreements and many irregularities in such payments were observed. Investigation by ED also revealed that Mr Vijay Mallya created complex web of shell or investment companies in name of his family members/employees with dummy directors. These companies though do not have any business activities and no independent source of income but holding substantial movable and immovable properties.”
An attachment order under PMLA is aimed to deprive the accused from taking benefits of his or her ill-gotten wealth and it can be challenged before the Adjudicating Authority of the said Act within 180 days.