Vijay Mallya return a shot in the arm for probe of bankers, officials
Bankers cleared loans worth Rs.6,027 crore to Mallya’s Kingfisher Airlines (KFA), ignoring false representations and the fact that the airline was in the red, said the officials, who requested anonymity.
Businessman Vijay Mallya’s return to India from the UK, inevitable now that he has exhausted his legal options against India’s extradition request, is set to provide impetus to a probe by the Central Bureau of Investigation (CBI) of a larger conspiracy involving public sector bankers who lent him money, two CBI officials said.
Bankers cleared loans worth Rs.6,027 crore to Mallya’s Kingfisher Airlines (KFA), ignoring false representations and the fact that the airline was in the red, said the officials, who requested anonymity. Mallya fled to the UK in March 2016 as banks closed in on him to recover loans given to the company, which was grounded in 2012.
CBI registered a separate case against Mallya and unknown others in August 2016 to probe the alleged conspiracy in the loans extended to Kingfisher by a consortium of 17 banks led by State Bank of India between 2005 and 2010. A chargesheet is yet to be filed in the case because Mallya hasn’t yet been questioned in connection with the suspected conspiracy.
On his return from the UK, the CBI may take Mallya into custody and interrogate him about the role played by senior bank executives who may have influenced the decision by banks to extend loans to Kingfisher Airlines, the two CBI officials cited above said. Several managing directors and executive directors of the public sector banks, who approved these loans could face the heat, one of the officials said.
Some of the MDs and senior officials from top banks – including SBI, Punjab National Bank (PNB) and Central Bank of India – were questioned by a CBI special investigation team (SIT) in mid-2018. Kingfisher Airlines’ total outstanding loans, including interest that piled up, amounted to a little over Rs 10,000 crore.The first official cited above said Mallya had met one bank MD on a Sunday. As banks are closed on Sundays, this is being seen as a move to influence the decision of loan approval.
Talking about the role of bankers, judge Emma Arbuthnot of the Westminster Magistrates’ Court in London, ordering Mallya’s extradition to India on December 11, 2018, said:“Conspiracies are very rarely proved with direct evidence and there is none in this case but there is evidence that the GOI [government of India] relies on from which it says the court can draw inferences that the bankers were involved in a conspiracy with KFA”.
“If the criteria for lending to KFA had been applied, if the background checks had been carried out, the loans should not have been granted. If the end-use certificates and all the other post sanction conditions applied, the loans would not have been misapplied in the way they were,” the judge noted.
The UK high court on Thursday rejected Mallya’s plea to approach the UK Supreme Court for appealing against the extradition.
Mallya’ extradition to India is based on a first information report filed by the CBI in July 2015 in connection with a Rs 900 crore loan sanctioned by IDBI Bank to KFA. The Enforcement Directorate has charge-sheeted Mallya in both cases, alleging that he diverted most of the money into foreign assets, the Indian Premier League (IPL) team and F1 motorsport firm Formula One. Mallya’s assets worth Rs 13,000 crore have already been attached by ED.
The second CBI officer cited above said “documents pertaining to loans given by 17 banks have already been scrutinized and several bank officials have been examined in last four years. A chargesheet will be filed soon”.
Mallya has repeatedly said that he is ready to pay his creditors in full for the loans he owes.
He tweeted on Thursday - “Congratulations to the government for a Covid-19 relief package. They can print as much currency as they want BUT should a small contributor like me who offers 100 percent payback of state-owned bank loans be constantly ignored? Please take my money unconditionally and close”.
