The Serious Fraud Investigation Office (SFIO) has referred a financial transaction between Vijay Mallya, chairman of the now defunct Kingfisher Airlines Ltd (KFAL), and Airbus SAS in 2006, to the Reserve Bank of India (RBI) and the Enforcement Directorate (ED) for alleged violation of the Foreign Exchange Management Act (FEMA).
A probe by the government agency which probes major financial crimes has found that Mallya allegedly “misrepresented” the source of an equity investment of $5 million (Rs 22.21 crore) in Kingfisher Airlines Ltd prior to its merger with Deccan Aviation Ltd.
According to the SFIO report, it accessed email exchanges between Mallya and a few top officials of Kingfisher Airlines on February 13, 2006 — from computers obtained by CBI — which show that the remittance of $5 million, allegedly shown as Mallya’s investment in the airline, had come from Airbus SAS, France.
The report has alleged that $5 million from Airbus SAS, France, was initially sent to the account of an entity called Lakewood Finance, allegedly managed by a close associate of Mallya. “Subsequently, the money was routed through the personal account of VJM (Vijay Mallya) in Standard Chartered Bank, Dubai to erstwhile KFAL and was accounted as consideration for the equity share capital by VJM,” the SFIO report said.
It alleged that the actual remittance was made on February 22, 2006 “immediately after the e-mail correspondence of February 13, 2006,” the report stated. “We do not comment on ongoing investigations,” Justin Dubon, head of global news at Airbus, said.
When contacted by The Indian Express, Mallya’s spokesperson said they did not have any comment to offer.
The SFIO has charged Mallya and a few top Kingfisher officials under Section 628 read with Section 75 of the Companies Act, 1956 , which pertain to penalty for making false statements in the balance sheet of the company.
“Airbus SAS, France declined to give the nature and details of all payments made to KFAL,
VJM and his overseas entities, citing legal issues,” the SFIO report said.
Apart from this, the SFIO report has alleged that the credits offered by Airbus to Kingfisher Airlines for bulk ordering of aircraft were “paid as per the requests of erstwhile KFAL to various beneficiaries” of the company such as Toyota Motor Corporation, Force India Formula One Team Limited, Lakewood Finance and others even before the airlines took delivery of the aircraft from Airbus.
The SFIO has also referred the transactions of Kingfisher Airlines and Airbus to the CBI for further investigation, the report said.
Kingfisher Airlines owes over Rs 9,000 crore to at least 17 lenders including SBI, IDBI Bank, Punjab National Bank, Bank of India, Bank of and United Bank of India.