CBI suspect 3 lakh Kingfisher transactions for money laundering

  • Abhishek Saran, Hindustan Times, New Delhi
  • Updated: Mar 18, 2016 09:35 IST
Vijay Mallya’s Kingfisher Airlines was grounded for defaulting on public sector bank loans. The CBI is now investigating transactions to determine if the loans were siphoned abroad. (HT File Photo)

The CBI is examining three lakh financial transactions through which a substantial portion of the public sector bank loans taken by Kingfisher Airlines Limited (KFL) were allegedly siphoned abroad.

The agency is examining if remittances sent to four countries were for business purposes or for “siphoning to build assets in violation of loan terms”, said a CBI source. The transactions comprise around 60% of a total five lakh transactions flagged by the CBI. The agency suspects this number could go up to 7.5 lakhs as bank documents connected to the loans run into thousands.

Liquor baron Vijay Mallya, as chairman for KFL, sought loans from 17 public sector banks to fund the airliner. As the debts remained, the banks declared him a willful defaulter, ultimately leading to the company’s fleet being grounded. A total of Rs 7, 000 crore was borrowed during 2004-12.

“It’s the beginning of the probe as far as default on loans from all the banks, not just IDBI bank, are concerned and the number of transactions will increase substantially,” said a CBI source.

“The IDBI loan of Rs 900 crore was the last loan taken by the firm at a time the firm was facing rough weather, but loans taken when KFL was doing well stand non-returned too,” said the source. The CBI on Thursday said it had expanded its probe to include the firm’s default on loans from IDBI and the 16 other public sector banks.

So far, the CBI was investigating just a single loan default case, which involved KFL’s non-return of IDBI bank’s Rs 900 crore in 2009. The Enforcement Directorate (ED) has similarly expanded its money-laundering probe to include all the 17 banks.

The agency suspects that parts of the loans could have been diverted abroad allegedly on false pretexts. In the IDBI bank case, under the CBI scanner are transactions “comprising a significant part of a sum of Rs 169 crore sent via a private bank for payments against lease rentals and purchase of aircraft parts, along with diversion of Rs 3.45 crore to KFL s London account,” said another source.

The 17 banks had in the second week of March approached the Supreme Court seeking to impound Mallya’s passport, however Mallya had already left for UK on March 2. Mallya’s financials came into the spotlight again as news broke of a Rs 515 crore deal UK-based Diageo Plc, the world’s largest spirits maker, was paying for Mallya’s exit from United Breweries.

SBI, the largest lender to Kingfisher, had approached the Debt Recovery Tribunal in Bengaluru to restrain Mallya from withdrawing his severance package.

CBI has been probing the IDBI case since July 29 last year after filing a FIR against Mallya, KFL, it’s the chief financial officer A Raghunathan and unknown bank officials. Since then, senior KFL officials including Mallya were questioned thrice and Mallya’s official and residential premises in Goa, Bangalore, and Mumbai searched.

“When we questioned Vijay Mallya in the case earlier, he insisted that the IDBI loan amount was spent strictly for business purposes. He denied any wrongdoing,” said the source.

The agency recently contacted the four countries for details connected to the three lakh overseas transactions. Refusing to reveal the names of these countries due to the “sensitive, ongoing probe”, a source said they were contacted through channels “other than judicial or diplomatic channels or mutual legal assistance treaties”. “At a later stage, we will send formal requests or Letters Rogatories to the four countries.” United Kingdom and tax havens are suspected to figure on this list.

The ED may take legal steps to get Mallya’s property attached, even provisionally, if he does not appear to its summons for questioning. “ED will target such assets of Mallya for attachment that gets proven as proceeds of the crime. In that case, assets equal to the amount of the crime’s proceeds, Rs 900 crore in the IDBI case for instance, may get attached with court’s permission,” said a Directorate source. The ED has undertaken an exercise to zero in on such assets.

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