The Modi government has begun proceedings against Vijay Mallya, the fugitive businessman, the first under a law it enacted last year.
New Delhi: Liquor baron Vijay Mallya became the first person to be declared a fugitive economic offender by a special court last week. ThePrint looks at the provisions of the act and the implications of the court’s decision for Mallya.
What is the Fugitive Economic Offenders Act?
The Fugitive Economic Offenders Act was enacted last year as part of the government’s efforts to bring to task people who have committed economic crimes and have managed to escape the country without facing prosecution.
The Enforcement Directorate, the agency empowered to implement the provisions of the act, has already moved to declare jewellers Nirav Modi and Mehul Choksi — involved in the Rs 14,000-crore fraud at Punjab National Bank — as well as the Sandesara brothers of the Sterling Biotech group as fugitive economic offenders.
The primary aim of the legislation is to facilitate confiscation of assets of such individuals both within the country and overseas to force them to return to India to face trial.
It covers a wide range of white-collar crimes, including loan defaults, tax evasion, bank frauds, benami property dealings and corruption. The act applies to fugitives involved in economic offences amounting to more than Rs 100 crore.
The fallout for Mallya
With the special court declaring Mallya a fugitive economic offender, all his properties in India and overseas can be attached by the central government.
The provision in the law has been worded in a manner that provides for confiscation of all properties, irrespective of whether they are bought from proceeds of crime or not. It also includes benami properties.
The act empowers the central government to dispose of the properties 90 days after the special court issues the confiscation order.
Mallya also loses the right to file or defend a civil claim in India.
Can Mallya appeal?
Mallya can appeal to the high court against the special court’s decision within a month of the order.