Bengaluru: The ‘King of Good Times’ is businessman Vijay Mallya’s favourite moniker for himself. But it is too early to say if that is how he will be remembered in the days to come.
A special court in Mumbai declared the UB Group chairman a ‘proclaimed offender’ in a loan diversion case this week.
Enforcement agencies and lenders are trying to recover over Rs.9,000 crore in dues from Mallya’s now-defunct Kingfisher Airlines and its guarantors.
Mint takes a look at the new titles now used to describe the one-time liquor baron and aviation magnate.
An anti-money laundering court in Mumbai issued the order declaring Mallya a “proclaimed offender” after the Enforcement Directorate filed a petition alleging he had used almost half of a Rs.900 crore loan from IDBI Bank to his airline for other purposes.
The declaration could make it easier for the investigating agencies to force Mallya’s return from Britain, where he is currently based.
A person is termed a proclaimed offender in a criminal investigation if the court believes that the accused has absconded or is concealing himself, so that the such warrant cannot be executed.
According to the provisions of the Criminal Procedure Code, Mallya would be required to appear before the Prevention of Money Laundering court and the investigation agency within 30 days. This tag will even enable an ordinary private citizen to arrest and hand over Mallya to the cops.
Mallya had expressed his disappointment over ED’s planned move over the weekend and said in an emailed statement that he was willing to cooperate with any investigation.
In the same case, the Central Bureau of Investigation (CBI) in March decided to probe a case of cheating against Mallya. The agency has started checking over 500,000 transactions of Kingfisher Airlines, according to a report in The Hindu. The CBI had registered a case in July 2015 under Section 409 (criminal breach of trust) and with Section 120 B (criminal conspiracy) of the CrPC. If proven, the charges can earn him punishment ranging from a decade behind bars to life imprisonment.
A wilful default occurs when either a borrower has not repaid when he can do so; when sanctioned funds have been diverted for other purposes; or when the borrower disposes of the assets pledged for availing of the loan without the bank’s knowledge.
Once a director of a borrowing company is tagged a wilful defaulter, banks can deny further loans to any company where he is a director. Banks are also empowered to use loan recovery options aggressively.
Punjab National Bank (PNB), the nation’s second biggest state-run lender, this week added eight defaulters to its February list of wilful defaulters, taking the total number to 913. Mallya’s Kingfisher Airlines is part of this list, with an outstanding of Rs.597.44 crore.
Mallya was termed wilful defaulter first by United Bank of India and later by others, including State Bank of India. The businessman has challenged the tag.
A person is termed an absconder when he or she hides or intentionally avoids appearing before the summoning authority to prevent the execution of a warrant. In March, a Hyderabad court issued warrants for Mallya’s arrest and convicted him on 21 April in a case of cheque bounce of Rs.50 lakh.
The Prevention of Money Laundering Act court has also issued a warrant in the Rs.430 crore fund diversion case in which Mallya has not yet shown up despite being asked to do so.
Mallya took to microblogging site Twitter in March this year to say; “I did not flee from India neither am I an absconder. Rubbish.”
In April, attorney general of India Mukul Rohatgi told the Supreme Court that Mallya was a “fugitive from justice in India.” The court was hearing the Rs.9,000 crore default case against Mallya filed by a 17-member consortium of banks.
The Indian government had sought Mallya’s deportation after revoking his diplomatic passport in April. In response, Britain asked India to seek his extradition.
In a 29 April interview with Financial Times, Mallya said that he has no plans of leaving the UK where he is in “forced exile”.