London: Time may be finally running out for fugitive liquor baron Vijay Mallya, as a series of court developments in the last few months have started to chip away at both his legal defence and financial assets.
The beleaguered businessman has already spent a fortune in legal costs as he battles cases across multiple courts in the UK.
Whether it is his extradition trial taking place at Westminster Magistrates’ Court or fighting Swiss financial giant UBS in the Royal Courts of Justice to hold onto his luxury London pad, Mallya has left no stone unturned in securing teams of Britain’s finest legal experts to win him his freedom and safeguard his high-flying lifestyle.
India wants Mallya extradited
Mallya was arrested in April 2017 on an extradition warrant and is out on a £650,000 bail bond. His extradition trial began in May 2018 and the verdict is set for December 10.
The liquor baron’s fate depends on how well the defence has been able to convince district judge Emma Arbuthnot on two crucial positions – one, that the case lacks prima facia evidence of Mallya committing fraud. And two, that Barrack 12 at Arthur Road Jail in Mumbai, where he is expected to be kept during the trial, is not compatible with Article 3 of the European Convention on Human Rights (EHCR). Article 3 states that “no one shall be subjected to torture or to inhuman or degrading treatment on punishment”.
Clare Montgomery, Mallya’s counsel argued in court that Kingfisher Airlines’s collapse was due to the global economic turn in the aviation sector and Mallya had himself pumped in money to keep it afloat, so allegations of a fraudulent motive of securing a bank loan hold no ground.
Part of the cache of documents submitted to the court by Mark Summers of the Crown Prosecution Service representing India contains witness statements of bank officers and investigating officers of the ED and the CBI. The judge also remarked that the most important consideration would be the prima facie case.
Also read: Plans of a Swanky Prison Cell for Vijay Mallya Violate Equality Before Law
A recent judgement in the extradition trial of P. Rajarathinam, the ‘takeover tycoon’, exposed the shoddy paperwork of Indian investigating offices which failed to impress the UK courts, who termed it a simple “narration” that lacked corroborative evidence and discharged him.
This is what Mallya hopes will help secure his freedom and, as The Wire has reported, there is some evidence to show that this may be the case. However, a senior officer of the CBI told this reporter on several occasions during the hearings that Mallya’s case is the agency’s finest work and will set a benchmark for all others to come.
Representative image. Credit: Flickr/CC BY NC ND 2.0
Until recently, the poor conditions of Indian prisons seemed to be a winning argument. Montgomery has extensively highlighted how Arthur Road Jail in Mumbai, like Delhi’s Tihar jail, suffers from overcrowding, a lack of medical facilities and random violence on premises. She has strongly contested the authenticity of the photographs and video provided by the CBI, calling them “staged”.
However, earlier this month, the London High Court admitted an appeal filed by India to re-open the extradition trial against bookie Sanjeev Chawla based on further assurances provided by India with regards to conditions of the cell in Tihar jail where he would be kept during his trial in the match-fixing scandal of 2000.
Chawla was earlier discharged by the Westminster Magistrates’ Court, but the high court cancelled this discharge and asked the district court to ignore the earlier verdict and continue the trial by admitting India’s new assurances on jail conditions.
This, legal experts say, is troubling for Mallya as India has provided similar assurances in his case.
UBS wants re-possession of London property
Mallya’s London home is a sprawling flat in the heart of the city – 18 and 19 Cornwall Terrace, a grade-1 listed property which lies along the famous Regent’s Park and was purchased by Rose Capital Ventures Ltd, a company registered in the British Virgin Islands in October 2005.
It is believed that Mallya’s connection with Rose Capital emerged during 2007 when a company owned by his family trust purchased shares in it. Mallya also acted on behalf of Rose Capital to secure a mortgage loan of £20.4 million from UBS bank. UBS has now commenced proceedings for possession of the property.
A pre-trial hearing of October 8-9 saw the Chief Master Marsh strike out many of the issues raised by the defence and set a date for the trial. On November 21, he also asked the defence to pay £88,000 as interim legal costs to UBS, a sum Mallya’s counsel Jonathan Gavaghan tried hard to bring down to £30,000-£40,000 “for what should be less than two days of hearing” but the judge was convinced that it was the “proper amount bearing in mind the contractual agreement”.
What was also raised in the court by UBS counsel Benjamin Faulkner was the delayed payment of a mere £11,000 due in October. Chief Master Marsh then cautioned the defence that the deadline of January 4 was “not an aspirational date” but “an extended period that erred on the side of generosity” and they “must make a payment as court will not extend it”.
Also read: CBI Seen as Weakening Its Own Case Against Mallya in London
Are Mallya’s coffers running dry? A repayment of mortgage of over £20 million will easily see Mallya spend a few million in legal costs to fight this re-possession claim. But only a large influx of funds can truly secure his London home. And such an influx could also bring a consortium of 13 Indian banks led by State Bank of India swarming, demanding payment of £1.145 billion immediately.
Indian banks want UK assets sold
The Commercial Court in London which registered a ruling by India’s Debt Recovery Tribunal here in England in November last year granted an interim freezing injunction against Mallya that prevented any removal or diminishing of his assets in England and Wales.
A plea by Mallya opposing the registration and worldwide freezing order was turned down by Judge Andrew Henshaw in May. He also allowed searches and seizures of goods at Mallya’s massive property in Tewin village in Hertfordshire, on the outskirts of London, called ‘Ladywalk’ and ‘Bramble Lodge’. The banks have now approached a county court to declare Mallya bankrupt following which they can demand his assets sold to repay his debts.
The liquor baron has always maintained that he is willing to negotiate repayment and also alleges that cases against him are nothing but a “political conspiracy”. He claims he is no stranger to the UK, having lived there since the 1990s, and has always taken offence to being called a ‘fugitive,’ especially when he claims that he met finance minister Arun Jaitley just before leaving the country.
The Bombay high court turned down Mallya’s plea on Thursday for a stay on the use of ‘fugitive’ tag by the Enforcement Directorate and under the Fugitive Economic Offenders Act, 2018 his assets can be seized. And with the worldwide freezing order upheld by London courts, has Mallya truly been cornered?
Ruhi Khan is a journalist and social scientist based in London. She tweets @khanruhi.