London: Vijay Mallya is becoming something of a fixture in London courts.
As the Indian tycoon fights his extradition on fraud charges, another set of lawyers are trying to overturn a £1.15 billion (almost Rs10,000 crore) worldwide freezing order against him across town. In the meantime, Mallya has to get by on Rs4.5 lakh a week, according to court documents.
On Friday, a London judge upheld the injunction, served on Mallya on Sunday, but granted a short extension to respond to the order because of the parallel proceedings over his extradition. The flamboyant businessman is accused by more than a dozen Indian banks, including the state-owned IDBI Bank Ltd, of wilfully defaulting on about Rs9,000 crore in debt for his now-defunct Kingfisher Airlines Ltd.
Mallya was arrested in London in April at the request of Indian authorities. The 61-year-old is currently in the middle of a two-week extradition hearing in a bid to avoid being sent back to his home country to face fraud and money laundering charges.
On 3 December, the day before his extradition hearing began, he was served with the freezing order. The order was granted after a London judge allowed an Indian court ruling given in January over Mallya’s assets to be enforced in the UK, according to a copy of the banks’ skeleton arguments on Friday.
The banks’ claim Mallya is the beneficial owner of at least three properties, cars and “other valuable chattels," according to their skeleton. His Hertfordshire, England, address, where he currently lives was bought in 2015 for £11.5 million (about Rs100 crore today) by a company called Ladywalk Llp that the banks say Mallya is behind. The same company bought an adjacent lodge for £1.5 million (Rs13 crore). Another company believed to be connected to Mallya bought a property in central London in 2005 for £5.5 million (Rs47.5 crore). He also has at least two yachts, Force India, on sale for €13.95 million (Rs105 crore), and Zippo, on sale for €329,500 (Rs2.5 crore).
The banks claim Mallya has breached Indian court orders by dividing some of his assets up between his three children. His son and two daughters are recorded as having nearly $30 million (Rs195 crore) each in property outside India, while his wife has $14.2 million (Rs92.3 crore) in real estate outside his country of birth. The consortium said it doesn’t know if these disclosures about his family’s assets are true or if Mallya himself is in fact the true owner of all the properties.
“Dr Mallya has arranged his affairs in a way designed to avoid his creditors being able to enforce against him," Nigel Tozzi, a senior trial lawyer acting for the banks said in skeleton arguments. “The evidence of dissipation/secretion is unusually good in this case."
A request by Mallya to increase his weekly allowance while his assets are frozen from £5,000 (Rs4.5 lakh) to £20,000 (Rs18 lakh) was adjourned by his lawyers.
After taking over a beer-and-liquor empire from his father in the 1980s, Mallya built Kingfisher Airlines into one of India’s leading carriers until it was grounded amid mounting debt in 2012. He has gradually ceded control of his drinks businesses to rivals in recent years. Diageo Plc. bought his United Spirits Ltd in April 2014, while Heineken NV is now the biggest shareholder of United Breweries, the maker of the nation’s best-selling Kingfisher beer.
Mallya left India nearly two years ago, saying he was moving to England to be closer to his children. He has since refused to return saying he fears an unfair trial amid the “media frenzy and hysteria" over the charges, which he claims are politically motivated.
Adding to his legal woes, a third set of court proceedings against him was disclosed last month when Diageo filed a lawsuit in London seeking to recover a $40 million (Rs260 crore) payment made to him when he was ousted from United Spirits last year. Diageo is also seeking about $141 million (Rs900 crore) over questionable payments made by companies affiliated with Mallya and has named his son Sidhartha in the suit. In Friday’s skeletons, the banks said Mallya claims he divided the payment from Diageo between his children. Bloomberg