Mallya extradition decision to be made in December

Vijay Mallya, the fugitive former head of India’s United Spirits, will have to wait until 10 December to hear whether he will be extradited to India to face charges of money laundering and fraud totalling £1.15 billion in the wake of the collapse of his Kingfisher Airlines in 2012. He has consistently denied any wrongdoing.

After hearing closing arguments England’s senior magistrate, Emma Arbuthnot, indicated that her ruling would be delivered more than a year after formal proceedings began on 4 December 2017. Meanwhile, Mallya will remain on bail, living at his mansion in Hertfordshire.

As he entered the court Mallya told reporters that his primary objective was to ensure that “everybody gets paid off”.

He also claimed that he had met the Indian finance minister, Arun Jaitley, just before he fled to the UK in March 2016, “and repeated my offer to settle.” In India, Jaitley denied such a meeting had taken place and that the statement is “factually false”.

Mallya later claimed that his offer was made to Jaitley during a fleeting meeting in the corridor within the Parliament of India.

Earlier Mallya had told reporters: “As far as I’m concerned, I’ve made a comprehensive settlement offer before the Karnataka High Court. I hope the honourable judges will consider it favourably.”

Asked if he could afford to make such an offer, he replied: “Obviously. That is why a settlement offer has been made.”

As part of the proceedings Lady Arbuthnot, viewed a video of conditions inside Barrack 12 at Mumbai’s Arthur Road jail where India plans to hold Mallya while awaiting trial. His lawyers had previously alleged that conditions there were not up to international standards and that medical facilities were insufficient.

His barrister, Clare Montgomery QC, said the video presented a false picture. She alleged that a “hasty clean up job” had been done to the cell. “This is a case for a prison visit,” she said.

Mark Summer QC, acting for the Indian government, said it was not their case that Mallya had taken out the loans intending that the airline should fail, but his intention was if it did, he would not have to repay them.

He said the buoyant message Kingfisher had given the bank about its future when it took out the loan was not even vaguely consistent with a much more downbeat internal assessment.

Ms Montgomery challenged the extradition request on each of the four grounds listed: that false information was provided to obtain the loan; that there was false information on the value of securities offered to obtain the loan; that the loan was used in ways contrary to the terms of the loan; and that the loan had been taken out with the expectation it would not be repaid.

“Far from being taken out with a view to default, it was ‘perfectly obvious’ the loan was taken out with view of successful running of the airline,” she said.

“The idea that this was a carefully thought out dishonest strategy promoted by him [Mallya] in the knowledge that KFA was bound to fail is just nonsense”

“This is a financial disaster for him as much as the banks.”

“It’s a pretty bizarre case the government of India is advancing. Can a jury safely exclude this was an ordinary commercial loan that fails for ordinary commercial reasons?”

Ms Montgomery challenged the Indian government’s allegation that there was a “stark disjoint” between what Mallya and some colleagues and the bank knew about Kingfisher’s finances.

The suggestion the there was “secret pocket of knowledge” within Kingfisher that was not disclosed to IDBI [formerly Industrial Development Bank of India] is “utterly unfounded”, she said.

She concluded that the Indian government had failed to make a prima facie case of dishonesty against Mallya and that the extradition request should be rejected.

Lady Arbuthnot’s expected ruling on 10 December is unlikely to be an end of the matter. Whichever side loses is almost certain to appeal.

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