New Delhi: A special Prevention of Money Laundering Act (PMLA) court in Mumbai Wednesday allowed a State Bank of India-led consortium to utilise liquor baron Vijay Mallya’s assets worth approximately Rs 11,000 crore.
SBI, leader of the 17-bank consortium that gave over Rs 9,000 crore to Mallya as loan, will now have charge of the said properties, which it can choose to auction and recover the dues.
The consortium is trying to recover Rs 6,205 crore from Mallya along with compoundable interest since 2013.
The PMLA court, however, allowed both parties to approach the Bombay High Court by 18 January before the order comes into effect.
“The restitution of these assets with SBI will now allow the bank to recover their loan by liquidation and auctioning,” explained an Enforcement Directorate (ED) official, who did not wish to be named.
ED had attached Mallya’s properties during its investigation. Last year, Mallya had posted on microblogging site Twitter that ED and other agencies have attached assets worth Rs 13,000 crore whereas he owes just over Rs 9,000 crore, including interest.
“Till now, the assets were with ED. Now, the bank can choose to auction or sell these assets to recover their money,” added the ED official.
According to the official, if liquidation of assets happens, it will fetch SBI approximately Rs 11,000 crore.
“These assets are mainly financial assets including shares, and some are properties,” the official explained.
ED had told the court in February 2019 that the agency does not have any problem if the financial assets are liquidated and money is recovered.
The case
The Central Bureau of Investigation (CBI) registered a case of cheating and criminal conspiracy under the Prevention of Corruption Act against Vijay Mallya on 29 July 2015 based on information from a source.
According to the central agency, Mallya managed to get a Rs 9,000-crore loan from a consortium of 17 banks led by SBI and gave false information to lenders with an intention to “cheat” the banks.
ED has alleged that Mallya’s now defunct Kingfisher Airlines “diverted” at least Rs 3,547 crore of the loan that it received from the consortium to keep it afloat.
Both ED and CBI have alleged that Mallya did not disclose his assets while executing a personal guarantee agreement with the lender at the time when the loans of Kingfisher Airlines were restructured in December 2010.
Both agencies also alleged that he amassed “huge properties outside India” including UK, US, France and Africa with that money.
According to ED, Mallya also allegedly diverted of Rs 3,432.40 crore through “over-invoicing” of lease rentals of aircraft between April 2008 and March 2012, and Rs 45.42 crore for making payment towards the rental lease of a corporate jet which was used by him. He also diverted another Rs 50.90 crore from Kingfisher Airlines to the Force India Formula One team that he controlled and another Rs 15.90 crore from Kingfisher Airlines to the Indian Premier League cricket franchise Royal Challengers Bangalore.
The ED has accused Kingfisher Airlines and Mallya of “concealment, possession, acquisition, and use of proceeds of crime”.
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