Troubles are beginning to mount again for liquor baron Vijay Mallya. The debt recovery tribunal (DRT) on Monday directed global liquor major Diageo not to make $75 million payment to Mallya even as the enforcement directorate registered a case of money laundering against him.
While hearing a plea filed by the State Bank of India (SBI) against Mallya, the DRT in Bangalore directed Diageo not to disperse $75 million payment till March 28, which was part of the ‘sweet-heart’ deal worked between the UK company and Mallya for the liquor baron to step down as the chairman of United Spirits recently.
The enforcement directorate (ED) has registered a money laundering case against him and others in connection with the alleged default of over Rs 900 crore loan from the IDBI bank.
Official sources said the agency recently filed charges under the Prevention of Money Laundering Act (PMLA) based on an FIR registered last year by CBI in the same case.
They said while the ED’s zonal office here has registered the case, sleuths are also looking at the overall financial structure of the now defunct Kingfisher Airlines and a separate probe under foreign exchange violation charges could also be
initiated. “Mallya and others will soon be questioned. The agency has collected relevant documents from concerned authorities and the bank in question,” they confirmed.
Last week, SBI filed four applications with the DRT seeking an arrest warrant against Mallya, impounding of his passport, full disclosure of his assets and liabilities and stopping the payment of the proposed $75 million promised by Diageo to Mallya. In his order, the DRT judge C R Benakanahalli said, “the dispersing of the bank amount is temporarily attached.”
The DRT also directed the companies — Diageo or United Spirits Ltd (USL) — not to disburse the promised sum of money to Mallya before the disposal of the original application on March 28, 2016.
In the DRT, the banks argued that they have the first right of funds from United Spirits as Mallya had stepped down from the company’s board. The banks want Diageo to deposit the funds in the tribunal.
The DRT, however, did not up take three other interim applications filed by the bank. ED has pressed charges under various sections of the PMLA against Mallya and others named in the CBI complaint.
The CBI had booked Mallya, director of Kingfisher Airlines, A Raghunathan, chief financial officer of the airlines, and unknown officials of IDBI Bank in its FIR, alleging that the loan was sanctioned in violation of norms regarding credit limits. The CBI action came as part of its wide-ranging probe into criminal aspects of loans declared to be non-performing assets (NPA) by public sector banks.
The ED is looking into the ‘proceeds of crime’ that would have been generated using the slush funds of the alleged loan fraud, they said.
Mallya had said on Sunday that he was making efforts to reach a ‘one-time settlement’ with banks through additional payments to the lenders, even as he denied 'personally’ being a 'borrower or judgement defaulter’ and alleged that 'disinformation campaign’ was being carried out to taint him a ‘poster boy’ of all bad loans. The debt-laden airlines had stopped operations in October 2012.
The consortium of banks including SBI, Bank of India, Bank of Baroda, Central Bank of India, Corporation Bank, Axis Bank, Federal Bank, Indian Overseas Bank, Punjab National Bank, Punjab and Sind Bank, Jammu and Kashmir Bank, UCO Bank, United Bank of India, IDBI and the State Bank of Mysore are trying to recover Rs 7,500 crore loans granted to the now-defunct Kingfisher Airlines.
(With inputs from agencies)
