Fugitive liquor baron Vijay Mallya was arrested in London Tuesday by Scotland Yard on an extradition warrant following a request from authorities in India where he faces charges of fraud. He was granted bail after he appeared at the Westminster Magistrates’ Court. The 61-year-old, who left India in March 2016, later tweeted: “Usual Indian media hype. Extradition hearing in Court started today as expected.”
The CBI, which is investigating the ‘wilful default’ of a Rs 900-crore IDBI loan on part of Kingfisher Airlines (KFA) promoted by Mallya, had sent an extradition request to the UK through the Ministry of External Affairs (MEA). The Enforcement Directorate (ED), which is probing a case of money laundering in the same matter, had got Mallya declared a proclaimed offender and sent a request for his arrest through the Mutual Legal Assistance Treaty route.
Sources in the agencies said a CBI team would soon leave for London to help the Crown Prosecution in court to extradite Mallya. “The team will carry relevant documents and evidence as desired by the prosecution there. The case will be fought by them. We will provide assistance. We are confident of bringing Mallya back. We have a strong case,” a CBI officer said.
ED sources said the agency had almost completed its investigation into the money laundering aspect of the case and would soon file a prosecution complaint. “Whatever assistance, evidence and documents are required in the case, will be provided by us,” a senior ED officer said. Sources in Home Ministry said the Internal Security (II) division had begun work on formalities involved in extradition proceedings.
The KFA defaulted on an estimated Rs 9,000 crore in loans taken from a consortium of 17 banks led by the State Bank of India. But only IDBI Bank lodged a complaint with the CBI. The ED case, however, concerns the entire default amount of Rs 9,000 crore. Government sources described Mallya’s arrest as the first major step in bringing Mallya back.
Extradition, however, is a long drawn process and will require India to produce robust evidence to convince the UK court that Mallya needs to be extradited. Minister of State for Finance Santosh Kumar Gangwar said, “We are now assessing how we can bring him back to the country and start judicial proceedings against him.” The government, he said, will leave no stone unturned to bring to justice anyone indulging in financial irregularities.
In January, a court ordered a consortium of lenders to start the process of recovering the loans. The ED has already attached over Rs 9,000 crore of Mallya’s assets. His Kingfisher Villa in Goa was auctioned recently — it was bought by businessman Sachiin Joshi. India had given a formal extradition request for Mallya as per the Extradition Treaty between India and the UK through a note verbale on February 8. While handing over the request, India had asserted that it has a “legitimate” case against Mallya and maintained that if an extradition request is honoured, it would show British “sensitivity towards our concerns”.
In January, a CBI court issued a non-bailable warrant against Mallya in the IDBI Bank loan default case after the agency filed a chargesheet and arrested nine persons including former IDBI Bank chairman, Yogesh Agarwal, his then colleagues and top officials of KFA. In its chargesheet, the CBI alleged that of the over Rs 900 crore loan granted to Kingfisher Airlines, Rs 262 crore was diverted by the company for personal use.
In its attachment order of Mallya’s properties, the ED had alleged that he had spirited abroad Rs 423 crore of loan money. Claiming that KFA had no intent to repay the loan ab initio, ED said “huge funds (Rs 423 crore) out of these loans were remitted outside India on the pretext of aircraft lease rentals etc but no supporting documents furnished so far to substantiate their bona fide. Therefore, not only the said loan was obtained in questionable manner, but part of the loan has been siphoned off abroad in a calculated and pre-designed manner.”