Liquor baron Vijay Mallya, who left India last Wednesday in spite of a Look Out Circular (LOC) against him for his alleged role in the Rs 9,000 crore loan default case, could face actions including attachment of his assets worth thousands of crores and Interpol’s ‘wanted’ notice.
The IDBI bank loan default case is being probed by the Central Bureau of Investigation (CBI) since October last year and on Monday, the Enforcement Directorate (ED) registered a First Information Report in the case under the provisions of the Prevention of Money Laundering Act.
The CBI is examining the circumstances under which Mallya left India despite the LOC being active at all exit points, including airports, a fact that points at “shocking lapses” by the concerned authorities, said an agency source.
The central probe agency confirmed on Wednesday that Mallya left India on March 2, probably for the UK. Attorney General (AG) Mukul Rohatgi informed the Supreme Court on Wednesday about his status.
The AG had on Tuesday sought an urgent hearing of a petition filed by 17 public sector banks, including the State Bank of India, seeking to restrain Mallya from leaving India and impounding his passport. On Monday, the Debt Recovery Tribunal (DRT) barred him from accessing the Rs 515 crore settlement he reached with Diageo.
“The CBI’s probe against Vijay Mallya in the Rs 900 crore loan default case involving IDBI is under investigation and we questioned him thrice since October 2015. The probe is document-based that records the irregularities, but if and when the CBI summons him again for questioning and he does present himself, appropriate legal actions will be taken,” a CBI officer said.
“The CBI will first give him a few opportunities to join the probe after which we will get an Interpol Red Corner Notice against him via judicial channels,” he said.
“Through the RCN, CBI will seek the assistance of the Interpol to get Mallya detained or arrested by local authorities of wherever he might be, to be brought back to India via deportation for joining the due process of law, ” the officer added.
He said the CBI is still examining how Mallya, an Independent member of Rajya Sabha from Karnataka, could bunk the LOC. “It’s also a fact that he does go abroad frequently for work purposes,” said the source.
The agency is also examining if there was a lapse in not requesting authorities for the impounding of Mallya’s passport even if “Mallya was co-operating in terms of making himself available for questioning,” said another agency source.
“The Look Out Circulars are opened to trace the absconding criminals and also to prevent and monitor effectively the entry or exit of persons who may be required by law enforcement authorities mentioned by it from leaving the country’s borders,” said the source.
Last October, the CBI had registered an FIR naming Mallya and former KA chief financial officer A Raghunathan for allegedly not returning a Rs 900 crore loan taken from the Mumbai-based public sector IDBI bank. The FIR also mentioned unknown IDBI officials who allegedly colluded with the accused defaulter.
The ED, on the other hand, is likely to target such assets of Mallya’s that could be proven as “proceeds of crime in the period, when the loan was taken that is during 2006 to 2012,” said an ED source. The source said the ED may move to get assets equal to the amount of the crime’s proceeds, which is Rs 900 crore in the IDBI case, attached with the trial court’s permission.
“ED has just registered a PMLA case against Mallya and his defunct airlines company and the investigations are yet to reach the stage where the agency could have requested for impounding of his passport,” said the source.
The source said when required the ED will summon Mallya thrice to give him sufficient opportunities to join the probe.
“If he chooses not to present himself before for questioning, ED will move the court against him for non-compliance and get his assets, which may be proceeds of the alleged crime, attached,” he said.
“Because of the PMLA case, ED will be more interested in his assets, the proceeds of crime, than the accused himself.”
The CBI had searched Mallya’s residential and official premises in October 2015 in Mumbai, Goa and Bengaluru and questioned him in December. It is also likely to widen its probe against Mallya’s long grounded Kingfisher Airlines (KA) by taking alleged defaults on additional loans worth Rs 3100 crore from 10 more public sector banks under its scanner.
The CBI is also likely to seek help from overseas authorities to verify allegations of “unspecified diversion” of a portion, equivalent to around $200 million, of the total loan sum to tax havens. Cayman Island and Mauritius are among the tax havens under the agency’s scanner, according to a CBI source.
The agency is scrutinising records connected with the recent categorisation of KA as an alleged “willful defaulter” by three public-sector banks - State Bank of India, Punjab National Bank and United Bank.
The CBI has asked IDBI to explain why it gave the loan to the airline, ignoring its own internal report and a board member’s reservations that had allegedly warned against such a step. The debt-laden airlines stopped operations in October 2012.
It will also examine if the loan was diverted to unspecified purposes including management of T-20 cricket teams in the Indian Premier League and the Caribbean Premier League.