Mallya faces ‘fugitive economic offender’ tag in India

Vijay Mallya’s legal troubles continue to mount following the ruling in December that the former head of United Spirits should be extradited to India to face fraud and money laundering charges.

In India a judge will rule on Saturday (January 5) whether the former head of United Spirits should be declared a fugitive economic offender.

Under a law passed last year anyone found guilty of this offence faces confiscation of assets to meet all debts and charges against them.

Although Mallya fled to the UK in March 2016, before the new law was passed, Indian prosecutors are pressing for it to be applied to him retrospectively over the £1.145 billion owed as a result of the collapse of Kingfisher Airways in 2012.

And Mallya is also facing bankruptcy proceedings in London. A consortium of 13 Indian banks is bringing an action in a bid to recoup unpaid the loans made to prop up Kingfisher.

TLT, the British law firm, says the 13 banks are seeking to have the 63-year-old businessman declared bankrupt in an action that will be heard in the High Court in the first half of this year.

Paul Gair, a partner at TLT, said: “This was issued in Dr Mallya’s local court, Northampton County Court, and has now been transferred to the insolvency list in the High Court of Justice in London for the hearing. The hearing is expected to take place in the spring.”
In May 2018, a High Court judge refused to overturn a worldwide order freezing Mallya’s assets and upheld an Indian court’s ruling that the banks were entitled to recover nearly £1.145 billion.

Mallya, meanwhile, remains on bail in the UK awaiting Home Secretary Sajid Javid’s decision on whether to extradite him to India.

It is unusual for a Home Secretary to overturn an extradition order unless there are unusual and substantial grounds for doing so.

In her ruling Chief Magistrate Dame Emma Arbuthnot found that Mallya had a case to answer in India over substantial “misrepresentations” of his financial dealings.

“There is clear evidence of dispersal and misapplication of the loan funds and I find a prima facie case that Dr Mallya was involved in a conspiracy to launder money,” she ruled after a hearing lasting more than a year.
She described Mallya as a “glamorous, flashy, famous, bejewelled, bodyguarded, ostensibly billionaire playboy” and rejected the defence suggestion that he was the victim of a politically motivated case.

Mallya’s lawyer says he will appeal to the High Court if the Home Secretary upholds the extradition order.
In a further action, Mallya is being threatened with repossession of his luxury London mansion overlooking Regent’s Park by Swiss Bank UBS, which says he has failed to repay a mortgage on it.

In addition, Diageo and United Spirits have filed suits in London and India seeking to recoup some £250m from Mallya for financial mismanagement while he was in control of the Indian company and for subsequent breach of contract.

Mallya has consistently claimed that he has sufficient assets to meet all his alleged liabilities and that he is not guilty of any wrongdoing.