Former United Spirits boss Vijay Mallya to appeal extradition

Vijay Mallya, the disgraced former head of United Spirits, could have his fate sealed for good this week.

(Photo: Wiki)

The Court of Appeal in London will hear his application to quash an order to extradite him to India where he is wanted to face charges of fraud and money laundering involving more than £1.15 billion. The hearing is scheduled to start on Tuesday and to last three days.

In February 2019 the then Home Secretary, Sajid Javed, signed the extradition order issued by Westminster Magistrates Court in December 2018. However, Mallya’s counsel, Clare Montgomery QC, persuaded the Court of Appeal that the original extradition ruling was “premised on serious, and in some cases very obvious errors”.

The appeal judges ruled that it was “reasonably arguable” that Mallya had no case to answer in India. They will hear those arguments this week.

Since he fled to London in March 2016, the former head of India’s United Spirits and United Breweries has consistently maintained that the £1.15 billion for which he is being pursued by a consortium of banks is owed not by him but by his failed airline, Kingfisher, which collapsed spectacularly in 2012 under a mountain of debt.

Mallya contends that Kingfisher was a simple business failure and that if the banks had allowed it to continue trading it would have recovered and they would have been repaid in full. He has repeatedly said that he wants to settle the debts and that he has more than enough assets to do so.

But Indian courts have seized his assets there and ruled that the creditor banks can dispose of them to achieve repayment. Mallya is challenging that decision.

The Indian authorities presented a dossier to Westminster Magistrates which they said contained a full audit trail of illegal diversion of funds by Mallya into shell companies in territories such as Switzerland, Ireland and the UK. They included his Formula 1 grand prix team, Force India, which subsequently became bankrupt.

The dossier also alleged that he used some of the funds to buy luxury properties around the world and that he diverted £40m to members of his family.

In India, Mallya has already been declared a “wilful defaulter” a “proclaimed offender” and “fugitive economic offender”. He has also been found to be in contempt of the country’s Supreme Court.

In her initial argument to the Court of Appeal, Montgomery said the Indian government’s case was “flawed and based on wilfully false allegations”. But the judges rejected her contention that Mallya would not receive a fair trial in India and that the charges against him were politically motivated.

The ruling by the Court of Appeal is likely to be final. While it is technically possible for a further appeal to the UK’s Supreme Court, leave to do so can only be granted if Mallya’s case raises a point of law which would set a precedent.

If his present appeal succeeds, Mallya’s troubles will be far from over. He still faces suits in both India and the UK for the £1.15 billion in dispute. His global assets have been frozen until they are resolved.

He is also being pursued by Diageo in London for settlement of a court ruling against him of approximately £140m and for what is thought to be a similar sum in India by United Spirits (now controlled by Diageo).

If his appeal is allowed, Mallya will not be able to travel widely. His arrest in London was under an international warrant which will continue to apply in all other countries with which India has extradition treaties.