Vijay Mallya invested nearly half of a Rs 950-crore loan from IDBI bank in properties outside India, investigators probing allegations of money laundering by the embattled liquor baron told a special court on Saturday.
The court is hearing a plea by the Enforcement Directorate, an agency that investigates financial crimes, seeking a non-bailable arrest warrant and a red-corner notice against the Rajya Sabha MP who owes Rs 9,400 crores to several banks in India. The court reserved its order until Monday.
ED counsel Hiten Venegaonkar told the court that Mallya siphoned off Rs 430 crore from the IDBI bank loan under heads such as aircraft lease rent, import of spare parts and aircraft maintenance services. The loan was given to his now-defunct Kingfisher Airlines.
The ED’s remarks before the court are the first specific charges against Mallya, who left the country in March amidst mounting pressure from banks to pay up.
The agency has approached several countries, including Britain, France and the United States over Kingfisher Airlines’ transactions.
Some ED officials suspect that money might have been parked in overseas tax havens, sources said.
“We have stumbled upon the money trail and found that of the money he borrowed, a portion had been used to buy a property outside India,” Venegaonkar said adding that major recipients of the amount have been identified, along with their bank details.
“Payments of various amounts to companies apparently unrelated to the business were made,” he said.
He said the agency has approached countries such as Ireland, UK and France to verify the transactions by Kingfisher Airlines which ceased operations in 2012.
The 60-year-old businessman -- once known as the ‘king of good times’ for his flamboyant lifestyle -- owns several properties outside the country, including in the US, South Africa, UK and France.
Mallya, believed to be in UK, ignored three summons by ED to appear for questioning in the case but claims he is not on the run and will abide by the law.
The ED counsel told the court that Mallya offered to answer its questions through video-conferencing or mail but that was not acceptable as “investigations cannot proceed as per the convenience of the accused”.
Venegaonkar said Mallya could tamper with evidence or dispose of key evidence.
Earlier, a consortium of banks rejected Mallya’s offer to pay Rs 4,000 crore by September towards settlement of his loan. The banks led by the State Bank of India (SBI) have demanded that Mallya be personally present at the next hearing of the case in Supreme Court on April 26.
The top court has also asked Mallya to disclose all assets owned by him and his family in India and abroad by April 21.
(With PTI inputs)