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Chasing Vijay Mallya

Chasing Vijay Mallya

The Vijay Mallya saga gets curiouser every passing day even as the investigations in the cases against him are making little progress. While the govt has given 'stern' warnings to Mallya to pay dues honourably or face action - the latest from Arun Jaitley - many call it just political posturing.

The Vijay Mallya saga gets curiouser every passing day even as the investigations in the cases against him are making little progress. While the government has given 'stern' warnings to Mallya to pay dues honourably or face action - the latest from finance minister Arun Jaitley - many call it just political posturing. Meanwhile, Mallya has offered to clear part of his dues by September.

The Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) have been roped in to look into charges of possible diversion' of money borrowed from banks for purposes other than as specified in the loan agreements. But both the agencies are hinting that the investigation may take time as they have to sift through lakhs of transactions to ascertain if the money has been diverted for non-business purposes. There is a sense that they are ready to give the benefit of doubt to Mallya.

According to a CBI official, Mallya had cooperated in the investigation. Downplaying the issue of a lookout notice issued in October last year, the official said that it was just a routine procedure and Mallya appeared before the agency thrice after that. On the other hand, ED seems to believe that many of the suspected transactions made by Mallya may have been genuine business deals.

Nonetheless, both the agencies are looking into charges of wilful default and diversion of funds. State Bank of India, Punjab National Bank and United Bank of India have declared Vijay Mallya a wilful defaulter.

CBI is looking at over 5 lakh transactions - about 60 per cent of these involve fund flows to foreign countries. "Now the probe is expanding abroad. We are in the process of sending Letter of Rogatory to these countries for assistance, while we have also asked the Financial Intelligence Unit (FIU) in India to seek assistance from FIUs in other countries," says a CBI official. The agency has got most of the documents required and is now examining them, he added.

CBI has already questioned 40 persons from banks and Kingfisher Airlines including Vijay Mallya, who was questioned thrice in December.

The agency has also questioned former IDBI Bank CMD Yogesh Agarwal and the bank's Credit Committee member B. K. Batra.Both the agencies are looking into the Rs 950-crore loan sanctioned to the airline by IDBI Bank in 2009.

Though the airline had borrowed around Rs 7,000 crore from a consortium of 17 banks at different times, an FIR has been lodged with regard to the loan offered by IDBI Bank. "The first information report (FIR) in the case of loan given by IDBI was lodged suo motu by the agency after we got a source-based information that there were some discrepancies in the (loan) account. We have been asking (all the 17) banks to file a formal complaint with us, but none of them has done that so far," says Devpreet Singh, Chief Information Officer of CBI. The agency says that the action was not a result of any government push.

The ED, which filed a case of money laundering against Vijay Mallya on 7 March, has now summoned the Kingfisher Airlines promoter for a personal appearance before the agency on April 2, 2016 but it is unlikely to happen. The agency had earlier summoned Mallya on March 18 but he had sought more time. "If Mallya does not appear before us on April 2, we may ask for revocation of his passport. After that we would ask for his deportation and if the UK government doesn't accept our request for deportation, we may ask for extradition," says an ED source. The ED is now probing the possible 'diversion' of loan money from IDBI Bank by Mallya. An ED official said that mere transfer of money to different account, even if it is a foreign account, does not establish diversion.

According to Virag Gupta, a Supreme Court lawyer, Vijay Mallya is guilty of several violations. One, he collected service tax and provident fund money but never deposited the money with concerned authorities. There are also money laundering charges as he tried to send money outside India through illegal means. Third violation is related to the Rs 250-odd crore payment received from Diageo as part of a settlement plan though the debt recovery tribunal had asked Mallya not to touch that money. Then comes the violation of wilful default of bank loans and misrepresentation of facts to take loan. "These are the different issues that the government can neither ignore nor give amnesty to Mallya just because he offers to pay a part of the loan," says Gupta.

Published on: Apr 07, 2016, 10:16 AM IST
Posted by: Gurpreet Kaur, Apr 07, 2016, 10:16 AM IST