UK red-flagged Vijay Mallya’s £17.8-million Swiss bank transfer

Sources have confirmed that Mallya’s bank transfer was converted into an SAR (Suspicious Activity Report) by the UKFIU and marked for information to the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) in New Delhi.

Written by Ritu Sarin | New Delhi | Updated: September 19, 2018 6:46:32 am
vijay mallya, mallya case, mallya fraud, mallya debt, mallya extradition, CBI probe Mallya case, mallya debt, mallya money laundering, vijay mallya kingfisher, mallya indian express, mallya arun jaitley meeting, CBI, indian express Vijay Mallya leaves a court in London. (Reuters/File)

In November 2015, the CBI, as reported by The Indian Express Tuesday, put on record that Vijay Mallya should not be detained when he arrived in Delhi from London; four months later his bankers reportedly didn’t act on the legal advice they got to restrain him when he flew back to London.

It was British authorities in London, a year later, who red-flagged a 17.86-million pound (Rs 170 crore) transfer Mallya made to a bank in Switzerland. Sources have told The Indian Express that it was this alert by UK Financial Intelligence Unit (UKFIU), on June 28, 2017, that was communicated to Indian investigating agencies and triggered the move for Mallya’s 13 lending banks to form a consortium and jointly move towards freezing of his assets in the UK.

Mallya was slapped a Worldwide Freezing Order (WFO) in the UK in November 2017.

READ | CBI put it in writing: ‘Inform us discreetly… detention of (Vijay Mallya) not required’

Sources have confirmed that Mallya’s bank transfer was converted into an SAR (Suspicious Activity Report) by the UKFIU and marked for information to the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) in New Delhi.

This was followed by a meeting between officials of agencies of the two countries in London wherein UK authorities advised that to restrain Mallya from disposing off his assets, lenders should attempt to extend enforcement of the Debt Recovery Certificate and order passed against him by a tribunal in Bengaluru in February 2017 to the UK.

Things moved quickly thereafter and, sources said, while the bank transfer to Switzerland could not be stopped due to the time required by Indian banks, it was this legal challenge that eventually led to him losing control over his UK assets valued at 1.14 billion pounds via the WFO.

READ | Who downgraded look out circular against Vijay Mallya and why?

The UK court order noted how in February 2016, Mallya had immediately “dissipated” the $40-million settlement he received from Diageo into bank accounts in Trusts whose beneficiaries were his children.

Reports of the State Bank of India’s Stressed Assets Management Group on the Vijay Mallya case make a reference to the genesis of the case. The report notes how it was a Joint Director of the CBI who first suggested the enforcement of the Debt Recovery Certificate in the UK since Mallya owned substantial assets in the UK.

READ | Before Vijay Mallya left India, his trail, as per SFIO probe report

The moveable and immovable assets which were prohibited from “dissipation” were three large properties; Mallya’s shares in the Sahara Force India Formula One team, two yachts, the Tipu Sultan sword and funds lying in bank accounts.

Mallya was quick to challenge the WFO but lost that appeal too.

READ | Vijay Mallya claims he met Arun Jaitley before leaving and offered to settle, FM says false, I snubbed him

Significantly, a SBI note dated July 5, 2018, lists the next steps to be taken for implementing the freezing order of assets in the UK and Wales. The bankers have stated that in light of the complex ownership structures of Mallya’s identified assets, bankruptcy proceedings against him should be initiated and even prior to that, a HCEO (High Court Enforcement Officer) be appointed to seize and sell Mallya’s moveable properties such as the bungalows named Ladywalk and Bramble Lodge.

It is noted in records that such a ‘’Writ of Control’’ was granted on June 26, 2018, permitting the HCEO or any enforcement agent acting under him to “to take control of goods belonging to Dr Vijay Mallya…the said HCEO is also permitted to use reasonable force to enter the property…the HCEO shall proceed with taking over of the moveables of Dr Mallya for realization towards the debts of the consortium of bankers.”

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