How the ‘king’ is managing bad times?

Embattled Indian tycoon Vijay Mallya, who has been declared a proclaimed offender, was arrested and released in London within hours!
How the 'king' is managing bad times?

Embattled Indian tycoon Vijay Mallya, who has been declared a proclaimed offender, was arrested in London on Tuesday by Scotland Yard on India’s request for his extradition on fraud charges. The 61-year-old liquor baron, wanted in India for defaulting on loans, was arrested after he appeared at a central London police station. Mallya was released on bail a few hours later.

‘Officers from the Metropolitan Police’s Extradition Unit this morning arrested a man on an extradition warrant. Vijay Mallya was arrested on behalf of the Indian authorities in relation to accusations of fraud,’ Scotland Yard said. He appeared at Westminster Magistrates’ Court in London and was seen walking out with his legal team a few hours later after being granted bail. ‘It was a voluntary action. He will be out in a few minutes,’ said a member of Mallya’s team at the court, without giving any further details of the bail conditions. Mallya, whose now-defunct Kingfisher Airlines owes more than Rs 9,000 crore to various banks, had fled India on 2 March 2016.

In January, an Indian court ordered a consortium of lenders to start the process of recovering the loans. Senior Indian officials described his arrest as the first salvo in the case, which will now involve a legal process in the UK to determine if Mallya can be extradited to India to face charges in Indian courts. The arrest comes weeks after Indian Finance Minister Arun Jaitley had indicated that Mallya’s extradition would feature in his talks during his visit to the UK.

Vijai Inner 1

India had given a formal extradition request as per the Extradition Treaty between India and the UK through a note verbale on 8 February. While handing over the request, India had asserted that it has a legitimate case against Mallya and maintained that if an extradition request is honoured, it would show British sensitivity towards our concerns. Last month, setting in motion the process of extradition of Mallya, the British government had certified India’s request and sent it to a district judge for further action.

ALL AGAINST HIM

-KINGFISHER LOAN FRAUD

The most notable of them is the suo motu case registered by the Central Bureau of Investigation (CBI) against Kingfisher and Mallya in July 2015 for alleged Rs 900 crore IDBI Bank loan fraud. Currently, Kingfisher owes over Rs 9,000 crore to 17 lenders including the SBI, IDBI Bank, Punjab National Bank, Bank of India, Bank of Baroda, United Bank of India, Central Bank, UCO Bank, Corporation Bank, Indian Overseas Bank, Federal Bank, Punjab and Sind Bank and Axis Bank, among others.

Vijai Inner 2

-BANKS APPROACH COURTS

The consortium of lenders has approached the Supreme Court seeking to recover $40 million payouts Mallya received out of a $75 million package from Diageo, following his resignation as chairman of United Spirits Ltd in February 2016. The Enforcement Directorate (ED) too has registered a case against Kingfisher Airlines under the stringent Prevention of Money Laundering Act (PMLA) and attached Mallya’s properties worth over Rs 9,661 crore. Mallya has also been declared a Proclaimed Offender by a special PMLA court.

-THE PROBE

The Serious Fraud Investigation Office (SFIO), too, has initiated an investigation into alleged diversion of funds and violations of the Companies Act by the airline, which was grounded in 2012 amid mounting debt and accumulated losses. In November 2010, banks for the first time restructured Kingfisher’s debt. The consortium of lenders converted Rs 1,355 crore of debt into equity at a 61.6 per cent premium to the market price of KFA stock. Besides, the bankers stretched the period of repayment of loans to nine years with a two-year moratorium, cut interest rates, and sanctioned a fresh loan. Kingfisher Airlines is also being probed for alleged anomalies in EPFO contribution.

-DUES TO EMPLOYEES

Apart from the government agencies and banks, Kingfisher has also been taken to court by its employees over non-payment of salaries. The Airport Authority of India and GMR Hyderabad International Airport in two separate cases have moved court against Kingfisher Airlines to recover dues of Rs 294 crore and Rs 12 crore respectively.

THE PROCESS

The extradition process from the UK involves a number of steps including a decision by the judge whether to issue a warrant of arrest. In the case of a warrant, the person is arrested and brought before the court for preliminary hearing followed by an extradition hearing before a final decision is taken by the secretary of state. The wanted person has a right to appeal to the higher courts against any decision all the way up to the supreme court.

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