Mumbai: The enforcement directorate on Monday requested a special court to label businessman Vijay Mallya as a fugitive under a recently promulgated law that allows the government to confiscate and sell assets of an offender, an ED official said. Mallya would be the first to be tried under the Fugitive Economic Offenders Ordinance, the official said.
The request was part of a fresh chargesheet against Mallya for alleged money laundering in connection with a Rs 6,900 crore loan granted to the now defunct Kingfisher Airlines Ltd, the official said on condition of anonymity. The special Prevention of Money Laundering court has not taken cognisance of the chargesheet.
Mallya will have six weeks to present himself in front of the court and contest the charges from the time the chargesheet is accepted, according to the norms laid down in the ordinance. If he fails to do so, he will be labelled a “fugitive economic offender”.
“Once Mallya is declared a fugitive, we will confiscate more than Rs 9,000 crore worth of assets,” said a second official, requesting anonymity.
The new law gives sweeping power to the government to sell properties confiscated in India and abroad even before the trial begins. Attached properties can only be auctioned off after a trial now.
A fugitive economic offender is one against whom an arrest warrant has been issued for a scheduled offence and who has left India to avoid criminal prosecution, or being abroad, refuses to return to face criminal prosecution.
The agency will also move the court for a fugitive tag against Nirav Modi and Mehul Choksi in the Rs 14,000 crore PNB fraud, said the second official.
ED had filed the first charge sheet against Mallya in June 2017 in a case related to the suspected diversion of a Rs 900 crore loan given to Kingfisher Airlines by IDBI Bank Ltd. The second charge sheet relates to the Rs 6,900 crore loan given to the airline by a State Bank of India (SBI)-led consortium.
The 17 banks in the consortium had extended a loan of Rs 6,900 crore to the defunct airline after a second round of debt restructuring in 2010. Out of this, SBI, with Rs 1,600 crore, has the largest exposure. The banks recalled the loan in February 2013, but could recover only around Rs 1,100 crore after selling pledged shares of UB Group companies.
The second charge sheet alleges that some of these funds were diverted for other purposes using over dozen shell companies, according to the first ED official.