Court orders extradition of Mallya to India in £1.15 billion fraud case

VJ Mallya, the former head of United Spirits, can be extradited to India to face charges of fraud and money laundering involving some £1.15 billion.

Dame Emma Arbuthnot, the senior magistrate at Westminster Magistrates Court, has ruled 16 months after he was arrested by the Metropolitan Police on an international warrant that there is sufficient evidence for him to face trial in his home country.

The case, which began formal hearings on December 4 last year, centred on whether Mallya ever intended to repay the £1.15 billion he lent by a consortium of Indian banks to prop up his disastrous Kingfisher Airlines.

The creditors claim he diverted the money into other activities including overseas property, his Force India Formula 1 grand prix team and the Royal Challengers Bangalore Cricket franchise. Mallya has consistently maintained that he has done nothing wrong and that he has sufficient assets to meet all his liabilities.

Even last week, Mallya renewed his offer to repay the debts associated with Kingfisher Airlines’ collapse, but only the principal. “Please take it”, he tweeted. Outside the court today he said: “I did not borrow a single rupee. The borrower was Kingfisher Airlines.”

The consortium of creditor banks is unlikely to accept the offer because it does not include a considerable sum in accrued interest. Indian courts have already seized vast assets from Mallya and the banks will hope for repayment in full once the various cases are concluded.

Nor would repayment address the charges of fraud and money laundering Mallya faces.

In India Mallya has been named as a proclaimed offender, been declared an absconder by a special Prevention of Money Laundering Act Court and has been found in contempt of the country’s Supreme Court for failure to make a full declaration of his global assets.

He fled to the UK in March 2016 following an alleged tip off that he was about to be arrested. He says he left India as part of a normal lifestyle pattern.

Since then India has succeeded in imposing a global freeze on his assets and he has been living on an allowance of £18,350 a week. Since August 2017 he has been on bail of £650,000 and has had to surrender his travel documents. He has been living at a mansion at Tewin in Hertfordshire and another in Regent’s Park, London, both of which are said to be owned by offshore companies.
His personal plane was impounded and sold, as was his ocean-going yacht and numerous Indian properties. His Force India Formula 1 grand prix team went into administration earlier this year and Mallya lost his stake before it was rescued. He no longer has any influence at Royal Challengers Bangalore cricket team.

In the normal course of events the British Home Secretary, Savid Javid, would have two months in which to undertake Mallya’s enforced deportation to India. Mallya, who has 14 days in which to lodge an appeal against the deportation ruling called the verdict “unfortunate” and said that his legal team will review all the magistrates findings.

Any appeal will send the case upward within the English and Welsh judicial system, with Mallya expected to remain on bail for some time yet.

Indeed, there is speculation in India, that if Mallya can delay extradition until after national elections next year, he may be able to avoid the ignominy of a trial.

Mallya has consistently alleged that he is the subject of a political witch-hunt by the government of prime minister Narendra Modi. A change of government could have significant implications for him.
Meanwhile, officials at Arthur Road gaol in Mumbai say that a high security suite is ready to hold Mallya while he awaits trial. The magistrate rejected the liquor baron’s attempts to prove that Indian prisons were not fit on human rights ground.

“He will have access to personal medical care to manage his diabetes and coronary problems… There was no ground at all to believe that he faces any risk at all (in jail),” the magistrate ruled.

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