New Delhi/London: UB Group chairman Vijay Mallya has “a case of fraud” allegations to answer, a London court was told on Monday at the start of a two-week hearing on India’s plea for his extradition.
“The focus of our case will be on his conduct and how he misled the bank and misused the proceeds,” said the UK’s Crown Prosecution Service lawyer Mark Summers, who is arguing the Indian government’s case for extradition.
“We will see the representations that are alleged by the government give rise to a case to answer of fraud,” Summers told judge Emma Arbuthnot at Westminster Magistrate’s Court in north west London.
Mallya, who is wanted in India on charges of money laundering and owing Rs9,000 crore in loans linked to his defunct Kingfisher Airlines, watched the proceedings impassively from behind a glass-windowed dock.
The businessman denies all charges against him.
The prosecution cited a large number of documents from banks with regard to loan applications amounting to Rs2,000 crore from 1 October 2009. Also mentioned were Mallya’s meetings with the chairmen of banks.
The first session was devoted to setting out the chronology of bank loans. Summers said he would examine where the money went later in the day.
Most of the documents and loans mentioned during the proceedings pertained to the State Bank of India and IDBI Bank. They included credit ratings, internal appraisals and Kingfisher’s business plans. Mallya had provided personal guarantees in some loan applications.
A team from the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) were also present at the hearing.
Vijay Mallya’s extradition trial will be spread over 10 days.
Mallya presented a spirited defence of his case to television channels before the hearing. “I have said repeatedly that these are false, fabricated and baseless charges, and that is my stand,” he said.
Asked why he left for the UK instead of standing trial in India, the businessman retorted: “I have been living in England since 1992.” Mallya had left for London on 2 March 2016, as banks owed in excess of Rs9,000 crore by Kingfisher Airlines closed in on him.
Mallya, who was arrested earlier this year, is likely to obtain an extension of his bail which ended on Monday.
In May, a Union home ministry delegation from India and officials from the UK met to iron out bottlenecks in the extradition process, with India’s home ministry saying in a statement: “India has the death penalty while UK does not, in addition to which the issue of prison facilities was also brought up.”
A senior central government, familiar with the developments of the case, said on condition of anonymity that it was likely that Mallya would base his arguments on “conditions in India’s jails”.
The CBI had moved court with Mallya’s extradition request in November 2016, after which in March this year, the UK certified India’s request for his extradition.
The extradition proceedings were based on a charge sheet filed by CBI in January in connection with a Rs900 crore loan default case by Mallya with IDBI Bank. In its chargesheet the CBI said, “the loan was given by IDBI bank in 2009-10, bending the rules of the Reserve Bank of India (RBI)”.
Later in June, the ED also filed a chargesheet against Mallya in a case related to the suspected diversion of a Rs900 crore loan given to his defunct Kingfisher Airlines Ltd by IDBI Bank Ltd—charges which were refuted by Mallya.
The chargesheet, filed under the Prevention of Money Laundering Act (PMLA), preceded an effort by the ED to seek Mallya’s extradition from London.
The ED’s case, a senior official told Mint on condition of anonymity, was based on Rs417.29 crore of the IDBI loan that had been remitted abroad and shown to be payments towards aircraft leases, rental and maintenance and servicing of aircraft parts.
CBI then registered another case against Mallya in August this year, for alleged irregularities in the repayment of Rs 1,600 crore loan taken from the State Bank of India. CBI had, in August, said “the case was registered against Mallya and others after receiving a complaint from SBI, which is leading a consortium of 17 banks that had given loans to Kingfisher Airlines (KFA).”
Kingfisher Airlines, the CBI had said, had taken Rs 6,900 crore from a consortium of 17 lenders in early 2010 after a second debt restructuring for the airline.
Reuters and PTI contributed to this story.