CBI charges Vijay Mallya with fraud, criminal conspiracy

Mumbai: The Central Bureau of Investigation (CBI) charged on Tuesday liquor baron Vijay Mallya with fraud and criminal conspiracy and sought judicial custody for former bankers and Kingfisher Airlines (KFA) officials arrested a day earlier in connection with the grounded airline’s unpaid loans of over Rs950 crore that it owed to IDBI Bank.

Mallya, who was chairman and managing director of KFA, was among the 11 named in the CBI charge sheet, the others being five retired bankers, four KFA officials and the airlines itself.

The bankers and KFA executives accused were arrested under the Prevention of Corruption and Criminal Conspiracy Act, Sections 13 (1) 13 (2) and 420 of the Indian Penal Code, according to the charge sheet. According to CBI, the bank officials entered into criminal conspiracy with the KFA executives for “misutilisation, misappropriation and diversion of funds”.

Vijay Mallya case: CBI seeks judicial custody of ex-IDBI chairman, others

On Monday evening, CBI sleuths arrested former chairman Yogesh Aggarwal and four other officials of IDBI Bank Ltd, and four Kingfisher Airlines executives in an alleged money laundering case involving UB Group chairman Mallya.

CBI named the four other bank officials as B.K. Batra, S.K.V. Srinivasan, O.V. Bundelu and R.S. Sridhar. The arrested Kingfisher Airlines executives are former chief financial officer A. Raghunathan, Shailesh Porkar, Amit Nadkarni and A.C. Shah.

CBI believes that the matter relates to three loans—of Rs750 crore, Rs200 crore and Rs150 crore —given to Kingfisher Airlines despite the airline’s poor credit rating and financial health.

Vijay Mallya case: CBI arrests former IDBI Bank chairman Yogesh Aggarwal, 7 others

CBI suspects that the loan amounts were diverted abroad to pay for loans and to settle some part of a debt to Bank of Baroda. The total fraud amount is Rs1,300 crore ((including interest and penalty), according to the CBI counsel, who said a trail of Rs261 crore has been traced back to Mallya’s personal assets outside India.

According to the remand copy reviewed by Mint, CBI is looking to detain the suspects in judicial custody as it believes they might tamper with evidence or flee abroad. It names Mallya as an accused absconder in the case.

In a notification to the BSE, IDBI Bank said that all the arrested bankers are retired officials and not in service of the bank. The lender said that it had previously clarified to the exchanges that it was helping CBI with its investigation and that it has no new information.

CBI raids Vijay Mallya’s UB Group office in money laundering case

CBI has been investigating loans given by IDBI Bank to Kingfisher group companies since 2014 and secured a non-bailable warrant against Mallya in a case related to alleged money laundering and wilful default of loans, Mint reported on 22 November.

Monday’s raids, followed by the arrests, came days after Mallya and his associate firms received a jolt after a debt recovery tribunal in Bengaluru ruled in favour of the public sector lender State Bank of India-led consortium to recover Rs6,203.35 crore from Mallya, a former Rajya Sabha MP, who fled to the UK last year. According to attorney general Mukul Rohatgi, Kingfisher Airlines owed Rs9,000 crore to the consortium and had been tagged as a wilful defaulter.

KFA’s default on the ₹ 9000 crore loan is being investigated by CBI separately.

jayshree.p@livemint.com