Mallya’s troubles to worsen for not disclosing assets on SC order

  • Abhishek Sharan, Hindustan Times, New Delhi
  • Updated: Apr 22, 2016 00:03 IST
Mallya and his defunct Kingfisher Airlines are facing separate probes by the Enforcement Directorate (ED) and the Central Bureau of Investigation . (Reuters file photo)

Beleaguered liquor baron Vijay Mallya’s woes could mount if he does not comply with a Supreme Court deadline that ends on Thursday for a full disclosure of his assets in India and abroad to back up his offer to repay bank loans.

Mallya and his defunct Kingfisher Airlines are facing separate probes by the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) over their alleged default on loans worth Rs 7,000 crore from 17 public sector Indian banks, including IDBI bank. They currently owe around Rs 9, 200 crore to the banks. The SC’s directive to Mallya came on April 7 after the SBI-led consortium rejected his Rs 4,000-crore loan repayment proposal.

Read : IDBI loan default: ED suspects Kingfisher’s brand was over-valued

With the two agencies, especially ED, closing in on Mallya, he can ill-afford to ignore the apex court’s deadline on assets’ disclosure, according to an ED source. “If Mallya is sincere about his offers to repay the loans owed to the banks, he should do what the apex court has asked him as a first step, to assure all concerned about his intent,” said the source. The ED, in any case, is considering a move to provisionally attach such Kingfisher assets that may have originated from the Rs 900 crore loan taken from IDBI in 2009, said the source.

ED has written to the external affairs ministry to seek Mallya’s deportation from UK.

Mallya and Kingfisher have denied any wrongdoing so far.

The ED has been in touch with the 17-bank SBI-led consortium, which had in March approached the apex court for an order to impound Mallya’s passport. On Monday, a Mumbai special court had issued a Non Bailable Warrant (NBW) against the embattled businessman that cannot be executed currently since he left India a month ago. But it can be executed if the ED forces his return, by seeking an Interpol alert and his extradition.

Mallya, 60, left India on March 2 as the creditor banks closed in on him to recover the money.

The ED had moved the court for a NBW against Mallya after he ignored three summons to appear before it in connection with Kingfisher’s default on the Rs 900 crore loan from IDBI Bank. Acting on an ED request, the Ministry of External Affairs recently suspended Mallya’s passport, asking him to explain why his passport should not be cancelled.

Loan repayment may affect probes against Kingfisher?

According to a government source who is familiar with the probes against Mallya, if Kingfisher manages to repay the entire amount owed to the banks, it will, in fact, impact the (ED probe) against Kingfisher and ease the pressure on Mallya.

“It will have to be examined legally, especially as far as ED’s probe is concerned, as to what may happen if Kingfisher pays up the entire loan and whether the ED’s money-laundering charge gets weakened after the loans are repaid,” the source said.

The source, however, said that the CBI’s probe against Mallya and Kingfisher may not get affected much even if the loans are repaid. “The CBI’s case, based on its July 2015 First Information Report in the IDBI unpaid loan, will stay unaffected because the agency is also looking at the role of public servants ---the IDBI Bank officials ---in not carrying out necessary due diligence prior to approving Kingfisher’s loan request for Rs 900 crore despite adverse indicators,” said the source.

Mallya had tweeted in the past that he was not on the run and would abide by the law. He is understood to have left for UK on his diplomatic passport though his exact whereabouts are not known.

Mallya’s key assets

Among the key known assets of Mallya in India are his Mumbai-based ‘Kingfisher House’ at Andheri and Goa-based ‘Kingfisher Villa’ at Candolim, which were pledged as security against the loans to the SBI-led bank consortium. Kingfisher had also reportedly pledged trademarks and two choppers to the banks as collaterals.

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