Vijay Mallya fugitive economic offender

Indian Banks Argue for Mallya Bankruptcy, UK Court Reserves Judgment

He was granted permission to appeal against his extradition order, which is scheduled in the Royal Courts of Justice in London for February next year.

London: A UK court on Wednesday reserved its judgment on a plea by a consortium of Indian public sector banks led by State Bank of India (SBI) seeking a bankruptcy order against embattled liquor tycoon Vijay Mallya as part of efforts to recoup around 1.145 billion pounds in unpaid loans.

Judge Michael Briggs reserved his judgment after hearing arguments from both sides in the insolvency division of the High Court on the petition filed by the banks last year, in relation to lending involving Mallya’s now-defunct Kingfisher Airlines.

The verdict in the case is now expected only in the New Year when the judge could either dismiss the petition and find in favour of the 63-year-old businessman or adjourn the case until the UB Group chief’s latest settlement offer is decided upon by the Indian courts.

Judge Briggs indicated that he may also consider seeking expert evidence on the applicability of Indian law vis- -vis English law in the case.

Also read: Indian Banks Back in UK Court Over Mallya’s Non-Payment of Debt

“And, I thought I was going to understand the case by now,” the judge said, in a light-hearted vein in reference to the complex worldwide litigation process involved in Mallya’s case.

While the banks argued for a bankruptcy order to ensure they receive what is owed to them amid a multiplicity of creditors, Mallya’s lawyers stressed that the Indian banks were identified as secured creditors by the Indian courts, which makes the bankruptcy petition in the UK court unfair.

“Why should we take less than everything we are owed, said Marcia Shekerdemian, the barrister for the Indian banks, in reference to settlement offers.

The court also heard that the banks do not accept the former Kingfisher Airlines boss’ assertion that most of his assets are in India and to a lesser extent worldwide. A villa in France and assets spread across the British Virgin Islands, a trust registered in the Caribbean nation of St. Kitts & Nevis and the Indian Empress superyacht in Malta were some of Mallya’s worldwide assets referred to during the course of Wednesday’s hearing.

“We can’t take Dr. Mallya’s assertions at face value, added Shekerdemian.

Mallya’s legal team, led by barrister Philip Marshall, argued for the bankruptcy petition to be dismissed because their client was being unfairly pursued by the banks in India and the UK on opposing grounds.

Also read: Vijay Mallya Makes Another Offer of 100% Loan Payback to Public Sector Banks

“Payment has been inhibited by virtue of the intervention by the Enforcement Directorate of India the banks are seeking a bankruptcy order against Dr. Mallya for non-payment but have created a situation where he can’t make a payment,” Marshall told the court.

A previous UK High Court ruling had refused to overturn a worldwide order freezing Mallya’s assets and upheld an Indian court’s ruling that the consortium of 13 Indian banks was entitled to recover funds amounting to nearly 1.145 billion pounds. The banks then launched efforts to recover dues as part of the freezing order, with the bankruptcy petition aimed at seizing UK-based Mallya’s assets to recover the dues.

Meanwhile, Mallya remains on bail pending the UK High Court appeal hearing in the extradition proceedings brought by India in relation to fraud and money laundering charges amounting to Rs 9,000 crores. He had been arrested on an extradition warrant back in April 2017 and has been fighting his extradition in the UK courts since then.

He was granted permission to appeal against his extradition order, which is scheduled in the Royal Courts of Justice in London for February next year.

(PTI)

Indian Banks Back in UK Court Over Mallya’s Non-Payment of Debt

A previous UK High Court ruling had refused to overturn a worldwide order freezing Mallya’s assets.

London: A consortium of Indian public sector banks led by State Bank of India (SBI) is back in the UK high court to seek a bankruptcy order against liquor tycoon Vijay Mallya over the alleged unpaid debt of around 1.145 billion pounds.

Judge Michael Briggs is presiding over a hearing in the insolvency division of the court in London this week in relation to a bankruptcy petition filed by the banks back in 2018 in their attempt to recoup unpaid debt accrued by the now-defunct Kingfisher Airlines.

The banks then launched efforts to recover dues as part of the freezing order, with the bankruptcy petition aimed at seizing UK-based Mallya’s assets to recover the dues.

Besides SBI, the 13 Indian banks include Bank of Baroda, Corporation Bank, Federal Bank Ltd, IDBI Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Punjab & Sind Bank, Punjab National Bank, State Bank of Mysore, UCO Bank, United Bank of India and JM Financial Asset Reconstruction Co. Pvt Ltd.

They have secured follow-on High Court orders to recover some of the funds owed to them as a result of Kingfisher Airlines’ unpaid loans.

Also read: Vijay Mallya Makes Another Offer of 100% Loan Payback to Public Sector Banks

In July, the banks had won a High Court battle to access documents they were after to establish the true ownership of assets they believed were linked with the embattled liquor tycoon.

“Frankly, the answer needs to be known as to which assets are that of Mr. Mallya, both for the purpose of the worldwide freezing order and enforcement of the judgment,” Justice Robin Knowles had ruled.

Two superyachts, a game reserve in South Africa, numerous undeclared high-value and vintage cars, valuable paintings and a piano previously owned by famous British singer-songwriter Elton John were among some of the assets on their target list.

The true ownership of a plush home overlooking Regent’s Park in the heart of London also remains in contention.

Mallya’s legal team has argued that the petition for bankruptcy in the UK should be dismissed because the banks are pursuing the same debt through the Indian courts.

The lawyers have also sought a stay on proceedings until Mallya’s appeal against his extradition order, scheduled in the Royal Courts of Justice in London, is heard in February next year.

Meanwhile, Mallya remains on bail pending the appeal hearing in the extradition proceedings brought by India in relation to charges of fraud and money laundering amounting to an alleged Rs 9,000 crores.

He had been arrested on an extradition warrant back in April 2017 and has been fighting his extradition in the UK courts since then.

(PTI)

UK Court Orders Vijay Mallya To Pay $135 Million to Diageo

Of the $175 million compensation that Diageo is demanding, the UK court has given order for Mallya to repay $135 dollars within 28 days as part of the summary judgement.

London: Liquor tycoon Vijay Mallya was ordered to pay $135 million to the British beverage company Diageo by the UK High Court on Friday.

The case was initiated by Diageo Plc, Diageo Holdings Netherlands BV and Diageo Finance Plc, who claim that Mallya, his son Siddharth, their company Watson Limited and a company held in a family trust called the Continental Administration Services Limited (CASL), owed them $175 million to be repaid to Standard Chartered Bank.

Justice Robin Knowles of the Business and Property division of the High Court heard that Mallya’s Watson and CASL had taken a loan from ICICI bank which they then refinanced by Standard Chartered Bank for which Diageo stepped in as a backstop on August 5, 2015.

In a February 2016 agreement between Diageo and Mallya, Diageo acquired the controlling stake in United Spirits and Mallya had stepped down after taking financial compensation.

Also read: Vijay Mallya Files for Permission to Appeal Against Extradition Order

This was taken against shares that Mallya had transferred to Diageo, which the company has not been able to access. and hence they approached the court for repayment from Mallya.

“We are suing Dr Mallya for repayment and damages amounting to approximately US$175 million. This is money Dr Mallya and some of his affiliate companies owe Diageo and we have always been clear that we are entitled to exercise our right to recover the sum in full,” said Diageo spokesperson Dominic Redfearn.

Of the $175 million compensation that Diageo is demanding, the UK court has given order for Mallya to repay $135 dollars within 28 days as part of the summary judgement. Add to this £200,000 that Mallya has to pay towards costs of litigation so far. The fate of the remaining $40 million will be decided during the long trial which will take place later this year.

The oral promise

Mallya’s main argument was that before entering into the Deed of Disengagement, Diageo had promised that it would not enforce its claims until certain orders granted in India are lifted. This oral promise was the basis on which Mallya relied.

During the course of the day-long hearing, Diageo counsel Daniel Toledano discussed in detail the transcripts of the conversation between Mallya and Diageo on February 23-24, 2016.

This is a “hopeless argument” said Toledano in reply to the defence’s assertation of the oral promise and pointed out that “these transcripts show no where did Diageo promise non-enforceability”.

Toledano told the court that “Mallya realised that if not him, then others in his empire could be charged” for repayment. Quoting verbatim from the transcript, he pointed out that at one stage Mallya said, ‘I trust Diageo, I’m living with that risk’ which shows that he was aware that British drinks giant could ask for repayment.

Mallya’s distrust of Diageo is fairly visible in the transcripts read out in court. In one such conversation, Mallya was heard repeatedly telling Diageo not to “screw” him as the negotiations progressed.

The missing transcripts

Mallya’s Barrister Daniel Margolin challenged Diageo by insisting that an oral promise had been agreed between Mallya and Diageo CEO Ivan Menezes and other officials of the company but “there has been no evidence from Ivan Menezes provided to the court (by Diageo).” He also insisted that Diageo should have made available transcripts of conversations between Menezes and another businessman Sunil Mittal and between Diageo chairman and Mallya.

Mallya’s team challenged Diageo’s attempt at seeking a summary judgment from the High Court instead of presenting detailed evidence in a trial. “The claims which remain subject of this application involve more than a straightforward application. It is a complex issue of facts and has areas of law which are less straightforward”, said Margolin urging the court to give consideration to the fact that negotiations and discussions have taken place over a long period of time.

“The subsequent two transcripts can be and should be understood as conveying on both sides an appreciation that there was no promise not to enforce rights,” said Justice Knowles discounting the defence’s argument on the missing transcripts.

Also read: UK Home Secretary Approves Vijay Mallya’s Extradition

“We are pleased to have won in a clear vindication of our position. The court was clear in rejecting Dr Mallya’s claim that there was a deal other than the one we signed. Diageo has consistently rejected those assertions. At all times through the protracted acquisition of USL, Diageo acted appropriately and in accordance with all legal obligations. All arrangements with Dr Mallya have been fully disclosed and accounted for,” said Redfearn.

In the summary judgement, Knowles ordered Mallya to pay Diageo $135 million against their claim plus £200,000 as legal costs within 28 days. He also refused Mallya’s right to appeal.

Earlier this month, Mallya had managed to get a one-year reprieve in his to pay Swiss bank UBS Rs 200 crore against the loan against his London house. He is also facing the consortium of Indian banks who have initiated bankruptcy proceedings against him to get access to his assets and bank accounts.

The Westminster Magistrates Court had sanctioned India’s request for his extradition for the Rs 9,000 crore Kingfisher Airlines scam in December following which the Home Secretary had signed the order paving way for Mallya return to India. With his appeal against the district court’s order of extradition scheduled for July in the High Court, Mallya faces the uphill battle of fighting for his freedom, even as his creditors close in on him.

Mallya’s Request to Appeal Against Extradition Rejected, But Legal Process to Continue

The liquor baron still has two avenues of appeal – one at the High Court and one at the Supreme Court – which could drag on for months.

London: A UK high court has rejected Vijay Mallya’s written appeal against a lower court’s decision to extradite him to India.

In December 2018, chief magistrate Emma Arbuthnot of the Westminister Magistrate Court had ordered the extradition of Mallya based on evidence of a prima facie case of fraud, money laundering and violation of the Foreign Exchange Management Act (FEMA) in India.

The case was then sent to the home secretary, who signed the extradition order on February 4.

Mallya then approached the administrative court division of the High Court to appeal this order on February 14. Written submissions were made to the court and a ‘judge on paper’ was appointed to study them to determine the merits of the case.

The ‘judge on paper’ has now refused permission to admit the case, which means it will not directly progress to a substantial hearing – a blow to Mallya’s cause.

Renewal form and Supreme Court

However, Mallya can still apply to make an oral presentation by submitting a renewal form. This renewal process will see a 30-minute oral hearing where both sides – Mallya’s lawyers and the Crown Prosecution Service (that represents India) – will renew their arguments for the judge to then decide if the appeal should progress to a full hearing.

“Permission to appeal was refused by a single judge on the papers on 5 April. The Court’s order to that effect was served on all the parties by e-mail the same day. Mr Mallya now has five working days in which to renew his application for permission to appeal. If he does so, there will be an oral hearing at which the Administrative Court will consider whether or not to grant permission to appeal,” said a spokesperson from the Crown Prosecution Service.

Mallya also has the option to approach the Supreme Court if the decision of the High Court is unsatisfactory. The process could take months.

Ruhi Khan is a journalist and social scientist based in London. She tweets @khanruhi.

Vijay Mallya Files for Permission to Appeal Against Extradition Order

On February 5, home secretary Sajid Javid had signed off on an extradition order triggering a 14-day window for the embattled liquor baron’s appeal application.

London: Embattled liquor baron Vijay Mallya, wanted in India on alleged fraud and money laundering charges amounting to an estimated Rs 9,000 crore, has filed his application in the UK high court, seeking permission to appeal against an extradition order signed by the British Home Secretary.

The 63-year-old businessman, who remains on bail on an extradition warrant in the UK, made the application in the administrative court division of the high court on Thursday, 10 days after home secretary Sajid Javid signed off on the order triggering a 14-day window for his appeal application.

The application has been sent for a judge on papers decision, which is expected any time between two to four weeks, a UK court representative said.

Also read: UK Home Secretary Approves Vijay Mallya’s Extradition

A judge on papers decision will involve a high court judge determining the merits of the application and if it is accepted, the case will proceed to a substantive hearing in the next few months’ time.

In the event that Mallya’s application is rejected at this stage, he will have the option to submit a renewal form .

The renewal process will lead to a 30-minute oral hearing during which Mallya’s legal team and the Crown Prosecution Service (CPS) – on behalf of the Indian government – will renew their respective claims for and against an appeal for a judge to determine if it can proceed to a full hearing.

The process, to be heard in the Royal Courts of Justice in London, could take months as the listing of a hearing will depend on the availability of judges and other factors.

Following the outcome at the high court level, both sides could apply for the right to appeal to the Supreme Court, which would involve at least another six weeks. However, that process is more complex as the UK High Court must certify that the appeal involves a point of law of general public importance, and either the High Court or the Supreme Court gives leave for the appeal to be made.

Also read: After Unfavourable Extradition Ruling, What Will Mallya Do Next?

Mallya and his legal team have not made a renewed comment in relation to the appeal but soon after the UK home secretary had signed off on the Westminster Magistrates’ Court order in favour of extradition on February 4, the businessman had taken to social media to confirm his plans to seek an appeal.

“After the decision was handed down on December 10, 2018 by the Westminster Magistrates Court, I stated my intention to appeal. I could not initiate the appeal process before a decision by the Home Secretary. Now I will initiate the appeal process,” he said in a Twitter statement earlier this month.

The former boss of the now-defunct Kingfisher Airlines took to Twitter again this week to call on Prime Minister Modi to accept his settlement offer in relation to the airline’s loan default.

Also read: Court Declares Vijay Mallya a ‘Fugitive Economic Offender’

Mallya has been based in the UK since March 2016 and remains on bail on an extradition warrant executed by Scotland Yard in April 2017.

In her verdict at the end of a year-long extradition trial in December last year, Judge Emma Arbuthnot had ruled that the flashy billionaire had a case to answer in the Indian courts.

The court had also dismissed any bars to extradition on the grounds of the prison conditions under which the businessman would be held, as the judge accepted the Indian government’s assurances that he would receive all necessary medical care at Barrack 12 in Mumbai’s Arthur Road Jail.

India and the UK have an Extradition Treaty signed in 1992 and in force since November 1993. So far only one successful extradition has taken place from the UK to India under the treaty – that of Samirbhai Vinubhai Patel, who was sent back to India in 2016 to face trial in connection with his involvement in the post-Godhra riots of 2002.

UK Home Secretary Approves Vijay Mallya’s Extradition

The former Kingfisher Airlines boss is wanted for alleged fraud and money laundering charges amounting to an estimated Rs 9,000 crore.

London: UK home secretary Sajid Javid has approved the extradition of liquor baron Vijay Mallya on charges of conspiracy to defraud and money laundering offences.

Government sources have said that India has taken note of the decision. “While we welcome the UK government’s decision in the matter, we await the early completion of the legal process for his extradition,” the sources said.

On December 10, 2018, the Westminster Magistrates’ Court in London had ordered Mallya’s extradition to India and declared him a “fugitive economic offender”.

Also read: Court Declares Vijay Mallya a ‘Fugitive Economic Offender’

Javid, the UK’s senior-most Pakistani-origin minister, had two months from that date to sign off on that order. The UK Home Office confirmed on Monday that after considering all matters, the minister had signed Mallya’s extradition order.

“On February 3, the Secretary of State, having carefully considered all relevant matters, signed the order for Vijay Mallya’s extradition to India,” a Home Office spokesperson said.

“Vijay Mallya is accused in India of conspiracy to defraud, making false representations and money laundering offences,” the spokesperson added.

Mallya is on bail on an extradition warrant executed by Scotland Yard in April 2017 after the Indian authorities brought fraud and money laundering charges amounting to Rs 9,000 crore against the former Kingfisher Airlines boss.

He now has 14 days from February 4 to apply for leave to appeal to the UK high court.

Also read: After Unfavourable Extradition Ruling, What Will Mallya Do Next?

The former Kingfisher Airlines’ boss has earlier indicated that he intends to file an application to appeal against the Westminster Magistrates’ Court verdict in favour of his extradition to India.

The businessman had told reporters soon after the ruling by Chief Magistrate Emma Arbuthnot in London in December 2018 that he would consider the verdict in detail and decide his next course of action. His legal team later confirmed that he would seek leave to appeal against the court order.

“Dr Mallya has now been able to consider the court’s decision and intends to file an application for permission to appeal at the appropriate time,” said Anand Doobay, partner at UK-based Boutique Law LLP, who has been Mallya’s solicitor through the extradition process.

(With inputs from PTI)

Court Declares Vijay Mallya a ‘Fugitive Economic Offender’

Mallya is the first to declared a fugitive under the new Fugitive Economic Offenders Act, which empowers authorities to seize assets of super-rich offenders.

Mumbai: A court in India set up under anti-money laundering laws declared liquor and aviation tycoon Vijay Mallya a “fugitive economic offender” on Saturday, paving the way for the government to seize his assets, according to Reuters partner ANI.

India recently approved a bill, the Fugitive Economic Offenders Act, empowering authorities to seize assets of super-rich fugitives. The ruling is likely to empower government agencies to confiscate his properties in India and overseas.

The bill is part of a push to prosecute a number of accused who have fled India in the last four years even as the country reels from a series of banking scandals, including a Rs 14,500 crore fraud at state-run Punjab National Bank that was uncovered in February.

The financial crime-fighting agency Enforcement Directorate had sought to declare Mallya a “fugitive economic offender”.

Also Read: After Unfavourable Extradition Ruling, What Will Mallya Do Next?

On Saturday, Mallya became the first person to be declared fugitive under the new law. His lawyer could not be reached for comment.

India has been trying to extradite Mallya from Britain after the collapse of his defunct Kingfisher Airlines.

It wants to bring fraud charges against the 62-year-old businessman over $1.4 billion in loans Kingfisher took out from Indian banks which the authorities argue he had no intention of repaying.

A London court ruled on Monday that Mallya should be extradited to India adding that there was a prima facie case against the tycoon, who moved to Britain in March 2016.

Mallya, who co-owned the Formula One motor racing team Force India which went into administration in July, has denied any wrongdoing and says the case against him is politically motivated.

(Reuters)