Vijay Mallya routed Rs 400 crore of IDBI loan abroad: Probe

Vijay Mallya IDBI loan: Sources familiar with the probe told The Indian Express that the money was allegedly sent abroad as payments for aircraft rental leasing and other operational expenses.

Written by Khushboo Narayan | New Delhi | Updated: June 14, 2017 7:53 pm
Vijay Mallya, IDBI loan, vijay mallya bail, kingfisher, money laundering, mallya money scam, kingfisher debt, indian express news, india news Liquor baron and businessman Vijay Mallya

An investigation into the now-defunct Kingfisher Airlines Ltd has found that the airline and its chairman Vijay Mallya allegedly routed overseas over Rs 400 crore out of the Rs 900 crore it obtained as loan from IDBI Bank Ltd.

Sources familiar with the probe told The Indian Express that the money was allegedly sent abroad as payments for aircraft rental leasing and other operational expenses.

Out of the total amount, sources said, IDBI granted a short term loan of Rs 150 crore to the airlines in October 2009. In the second tranche, they said, the bank loaned Rs 750 crore to Kingfisher, of which Rs 200 crore was in the form of a bridge loan and the rest for other purposes.

Kingfisher owes over Rs 9,000 crore to 17 lenders, including the SBI, IDBI Bank, Punjab National Bank, Bank of India, Bank of Baroda, United Bank of India, Central Bank, UCO Bank, Corporation Bank, Indian Overseas Bank, Federal Bank, Punjab and Sind Bank, and Axis Bank among others.

Investigating agencies such as the CBI and the Enforcement Directorate are currently probing the IDBI loan default by the airlines.

According to sources, the investigation has revealed that Mallya allegedly colluded with IDBI Bank officials to secure loans without giving any valuable collateral. They said that the money was allegedly used for purposes other than those specified by the airlines while seeking the loan.

For instance, sources said, investigators found that Kingfisher transferred about Rs 53 crore of the loan amount to Mallya’s Force India Formula One Team Ltd while about Rs 70 crore was diverted to two UB Group firms.

Apart from this, sources said, the agencies found that the airlines allegedly diverted money by paying higher rentals for aircraft leased from two foreign firms run by former employees of UB Group.

The probe found that IDBI approved the Rs 900-crore loan to Kingfisher Airlines despite its weak financials, low credit rating and negative net worth.

“The investigation also found discrepancies in the valuation of the Kingfisher brand, which was kept as collateral with IDBI Bank for the loan. The bank did not take any expert opinion on whether they could enforce the Kingfisher brand valued at about Rs 3,400 crore,” said sources.

In January, the CBI had booked five current and former IDBI bankers and four employees of Kingfisher Airlines for alleged default of the loan amount. The CBI has charged Mallya and the other accused under section 120B (criminal conspiracy), 420 (cheating) and under sections 13 (1) (d) and 13 (2) of the Prevention of Corruption Act.

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  1. C
    Christiaan Avenant
    Jun 17, 2017 at 4:36 am
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    Reply
    1. B
      bharat
      Jun 14, 2017 at 11:22 pm
      Wait .. he took the loan , leased an aircraft and paid the lease .. so if the aircraft owner is international , how the he can pay the lease domestic ? So the problem here not routing the funds ... correct le should have been " IDBI Fraud exposed, loan to MALLYA approved without expert valuation"
      Reply
      1. R
        raj
        Jun 14, 2017 at 10:59 pm
        India will not be able to do anything now arrest all those bank officers who gave him loan starting from chairperson of SBI it was public money, every one wants farmers to pay loans but no one is asking how come he flied out of India and how come banks gave him loan
        Reply
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          aravind
          Jun 14, 2017 at 1:49 pm
          The British has a tradition of protecting looters and thugs and whatever wealth is loot from colonies it will be in the same way.. they have laws to cover it! Mallya is going to media saying that there is not enough proof and CBI failed to give the proof in time, extending his bail! Hope CBI will do their job well next time and in good time! It is shame on our establishments as a whole that this businessman is able to fool everyone. Everyone knew he was lavishing and money taken on loan but the government at that time and the bank officials who loaned him simply were not sincere to their organizations and fell victim to the freebees given.
          Reply
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            Anad
            Jun 14, 2017 at 10:02 am
            It seems we are focusing more on one thug Vijay Mallya but the investigation should spread to major facilitators from bank officials and beurocrats and politicians who allowed this thug to manipulate and run away from the country.Bank officials are the biggest criminals wolrd over and responsible for the fall of many economy.2007 recession is an example and it is the greed and incompetency of bank officials which resulted in death to many nations and loss of billions of business. There should be a watch dog to monitor the bank officials who sanction loans to business houses and individuals with out enough securities and immediatel we need to arrest some from IDBI, SBI , BOB ad ICICI the major offenders who run parallel economy.We cannot have two law for recovery with poor farmers and small time traders harassed for even few thousand rupees where as thugs like mallya , Ruia and Adanis are running empire with billions of tax payers money.If system is not correcting people should step in
            Reply
            1. D
              Dara
              Jun 14, 2017 at 9:31 am
              What about a clear case of 'Criminal Breach of Trust' Completely relevant to this matter. Think about it. Not sure what the punishment is in India. Dara
              Reply
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                ashoks
                Jun 14, 2017 at 9:05 am
                The CBI has charged Mallya and the other accused under section 120B (criminal conspiracy), 420 (cheating) and under sections 13 (1) (d) and 13 (2) of the Prevention of Corruption Act.but what is the result ?Why was he not prevented from going abroad
                Reply
                1. I
                  Indian
                  Jun 14, 2017 at 7:38 am
                  Mallya should be abducted from England by Indian security Agencies and brought to India as ENGLAND will protect anyone landing in UK with more than 20 Lakh Pounds even if made by THEFT, PIMPING, MURDERING etc. ........................... England has been a THUG- PIMPING country for more than 400 years and the BRITISH will SELL THEIR MOTHERS for few MILLION POUNDS.
                  Reply
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                    gyaneshwar
                    Jun 14, 2017 at 8:43 am
                    these English Sahibs we hold in High Esteem specially The Desis English people are the Biggest Thugs Cheats Looters and Money and assett Cheaters of the world they promote Money Laundering Backing any Corrupt regime or en y for Monetary gain.all the Biggest Money THUGS are given Shelter in England ,MAHA CHORS BILAYATIS!
                    Reply
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