Mumbai: United Breweries Holdings Ltd, or UB Group, chairman Vijay Mallya on Monday told a special court that he cannot be said to have “refused to return to India” as he is cooperating with the authorities in the UK in a case related to extradition proceedings and has submitted himself to that jurisdiction. In his reply submitted through his lawyers to the special Prevention of Money Laundering Act (PMLA) court, Mallya has said his adherence to the UK law cannot and does not render him a “fugitive economic offender”.
“Despite efforts to repay public sectors, the enforcement directorate (ED) has at every stage resisted the effort,” said Mallya’s response, which ran into more than 135 pages. “The endeavour of the applicant (ED), who is a central government body, is to confiscate assets and thereby deprive creditors such as public sector banks who were lenders to Kingfisher Airlines (KFA), employees of KFA who are claiming salaries and TDS and other authorities such as income tax and service tax who have made claims on KFA,” the reply said.
Amit Desai, senior counsel for Mallya, argued that the court should first hear the intervention petition filed by various stakeholders, including the State Bank of India (SBI), Standard Chartered Bank, United Spirits Ltd, and Mallya’s relatives.
Hiten Venegaonkar, an advocate representing the Enforcement Directorate, argued the intervention petition is only related to protecting the properties but if the court first hears the plea to declare Mallya a fugitive economic offender and if the investigation agencies successfully convince the court, it will not be necessary to hear the other cases.
“We have sent Mallya several summonses and notices to be present at Karnataka high court but neither he nor his counsel has appeared even once. However, here when the ED is contemplating to declare him fugitive economic offender, for the first time he files his reply through his lawyers,” argued Lakshmi Iyengar, counsel for the official liquidator for United Breweries Holdings Ltd.
“So far, he has not submitted anything in other cases pending against him,” said Iyengar, responding to the argument made by Mallya’s lawyers that cases are already going on in Karnataka high court and hence this case is arbitrary, unreasonable and whimsical.
“We were asked to attend this hearing by Karnataka high court as an official liquidator, an agent of the court and custodian of the interest of secured and unsecured creditors. We are not concerned with Mallya’s private properties. However, assets of UBHL attached by ED fall under our purview,” she said.
Earlier in the day, State Bank of India had also approached the court as lead consortium banker to Kingfisher Airlines and argued that the state-owned lender also seeks to intervene in the matter as the lenders have the first charge over several properties owned by Mallya. “Whatever properties we had attached as lenders, ED has gone ahead and taken possession of those properties and hence we are in court,” argued the SBI counsel.
Special Prevention of Money Laundering Act (PMLA) judge M.S. Azmi granted the ED time till 28 September to file its reply to SBI’s intervention petition and posted the hearing on 5 October.
The judge also clarified that he will take up all the matters together where first he will decide whether parties who are seeking to intervene at this point can do so and then will decide on ED’s plea to declare Mallya a fugitive economic offender.
The court had on 30 June issued a notice to Mallya to appear before it on 27 August after ED enlarged its money laundering probe against him and others in a bid by a consortium of banks to recover loans worth ₹ 9,000 crore.
The ED has also sought immediate confiscation of assets worth about ₹ 12,500 crore, of which it has already taken possession of assets worth more than ₹ 8,050 crore.
In June, the UK’s commercial court ruled in favour of a consortium of 13 Indian banks seeking to recover dues allegedly owed to them by Mallya. The commercial court, part of the high court in London, also granted permission to an enforcement officer to enter the 62-year-old tycoon’s properties in Hertfordshire, near London.