ED moves court to confiscate Rs 12,500-cr assets against Vijay Mallya to mark him a fugitive offender

India made its first move to clamp down on big bank loan defaulters under a new law as the Enforcement Directorate (ED) moved court against liquor baron Vijay Mallya seeking to declare him a ‘fugitive offender’ and to confiscate his assets worth Rs 12,500 crore.

The application accessed by PTI said the ED seeks to “confiscate all the properties of Vijay Mallya including those properties indirectly controlled by him.” The application said the “estimated value of properties proposed for confiscation is to the tune of Rs 12,500 crore approximately, which includes immovable properties as well as movable properties in form of shares.” The action has been taken in pursuance of two bank loan money laundering cases of over Rs 9,000 crore involving the IDBI bank and an SBI-led consortium and these became predicate offences for the latest action under the Ordinance brought by the Modi government early this year.

The ED, in the application, furnished pieces of evidence that it filed as part of its two charge sheets against Mallya and others under the Prevention of Money Laundering Act (PMLA) and stated that in both cases, non-bailable warrants have been issued against Mallya by the court.

The government brought the fugitive ordinance as “there have been instances of economic offenders fleeing the jurisdiction of Indian courts, anticipating the commencement, or during the pendency, of criminal proceedings.” The agency charged in its application that Mallya “had no intention to repay the loans from the start and though he and Ms UBHL (United Breweries Holdings Limited) had substantial assets that were sufficient to repay the loans, they intentionally withheld the details from the banks.” It alleged that a “criminal conspiracy was hatched from inception” by Mallya and his firms to obtain loans in “gross violation” of established procedures.

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“The investigation under PMLA also revealed several instances of diversion of funds at the behest and for the benefit of Mallya through Ms Kingfisher Airlines,” it said.

The agency said it has attached assets worth over Rs 8,040 crore of Mallya and others under the PMLA in the past.

Two criminal complaints were filed by the ED in these instances after taking cognisance of CBI FIRs. Mallya is contesting the money laundering charges in London as part of India’s efforts to extradite him from there and face the legal system here in connection with an alleged loan default of over Rs 9,000 crore of various banks.

“A Fugitive Economic Offender is a person against whom an arrest warrant has been issued in respect of a scheduled offence and who has left India so as to avoid criminal prosecution, or being abroad, refuses to return to India to face criminal prosecution,” the government had said.