Debt-trapped businessman Vijay Mallya on Thursday sought time till April for personal appearance before the Enforcement Directorate (ED) in the IDBI bank loan default case, even as the Kingfisher House, the erstwhile headquarters of his defunct airline, failed to throw up even a single bid at an auction conducted by SBI Caps for a consortium of banks led by State Bank of India (SBI).
On a day when no bids were made at the auction of 17,000 sq ft Kingfisher House at Vile Parle near the domestic airport her conducted by the SBI Caps, official sources said that Mallya had written to the ED about his inability before the agency on Friday for questioning in the alleged money laundering case involving the default in payment of `900 crore dues to IDBI bank from the now-defunct Kingfisher airlines.
The sources said that the beleaguered businessman, who is believed to be in the United Kingdom, had sought time till April to appear before the ED.
On March 11, the ED had issued summons to Mallya to appear before it on March 18 for questioning under the provisions of the Prevention of Money laundering Act in the IDBI case.
The sources said that the ED officials were examining the reasons cited by Mallaya for his inability to appear before the agency for questioning in the IDBI bank loan default case. They said that the ED would soon take a final decision on whether to give Mallya time till April to join the investigations in the case.
Based on a case registered by the CBI last year, the ED had recently registered a money laundering case against Mallya and others. The agency is also investigating the overall financial structure of the now defunct Kingfisher Airlines and will look into any payment of kickbacks to secure loan.
The ED is looking for details of overseas and domestic assets of Mallya and his company officials, in coordination with central security agencies and the CBI
On its part, the CBI had booked Mallya, the Chairman of Kingfisher Airlines, its Directors, former Chief Financial Officer of the airlines A Raghunathan and unknown officials of IDBI Bank in its FIR alleging that the loan was sanctioned in violation of norms regarding credit limits.
The ED, which has already questioned Raghunathan, former United Breweries Chief Financial Officer Ravi Nedungadi along with a few other accused in connection with the money laundering case registered by it against Mallya, is looking into the “proceeds of crime” that would have been generated using the slush funds of the alleged loan fraud. The agency is also investigating if some of this amount was sent abroad illegally.
The ED has also written to the 17-bank consortium, led by SBI, which lent money to the grounded airlines, and later went to the Debt Recovery Tribunal (DRT) for recovery of these dues. It has also sent official requests seeking details of the investigations being conducted by the Income Tax and Service Tax departments and the Serious Frauds Investigation Office (SFIO) against the airline in the past.
Meanwhile, the auction of Mallya’s Kingfisher House, organised by the SBI Caps, proved to be a non-starter, with no bidders coming forward to purchase the property owing to litigation fears and a high reserve price of `150 crore fixed by the auctioneers.
The auction of Kingfisher House, which has a built—up area of over 17,000 sq ft at Vile Parle near the domestic airport in north-west Mumbai, began at 11.30 am and ended at around 12.30 pm, with no bidder coming in with an offer to purchase the property.
“There were no bidders. I think the higher reserve price was the reason for it,” a SBI Caps official said.
The auction was conducted under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (Sarfaesi), 2002.
The official said that the bidders had stayed from the auction because the latter must have felt that the reserve price of Rs 150 crore fixed for Kingfisher House was on a higher side.
Sources in the SBI Caps said that the 17 member consortium of banks would soon meet to review the reserve price fixed by it earlier. “The auctioneer may be asked to scale down the reserve price of the property by at least Rs 50 crore when the property is put up for a fresh auction in the coming weeks,” the sources said.
The SBICAPS Trustee, a subsidiary of SBI Caps, had held online auction of Mallya’s Vile Parle property.
The decision to auction Kingfisher House was taken in the aftermath of the lenders taking over the property in February last year as part of their efforts to recover part of their dues amounting to over Rs 9,000 crore, which includes unpaid loans and accrued interest.