A Special Prevention of Money laundering Act (PMlA) court issued a Non-Bailable Warrant (NBW) against Vijay Mallya on Monday, in a development that paved the way for the Enforcement Directorate (ED) approaching the Interpol to issue a Red Corner notice against him in the over Rs900-crore IDBI loan fraud case.
Special Judge PR Bhavke not only issued the NBW against Mallya, but also rejected a plea by the now-defunct Kingfisher Airlines (KFA) contesting the ED’s claim that the latter had “siphoned off” Rs430 crore from the loan taken by his company to purchase properties abroad.
The NWB against Mallya, which came barely three days after the Union Government suspended his diplomatic passport, is the consequence of his failure to present himself before the ED despite three summons having been issued against him on March 10, March 18 and April 2.
What compounded matters for Mallya was that the PMlA court rejected outright a plea by now-defunct KFA challenging ED’s claim that Rs 430 crore was siphoned off from the Rs 900 crore loan taken from IDBI Bank and used it to acquire properties abroad.
Counsel for the now-defunct KFA Pranav Badeka told the court that the ED’s charges that Mallya had “siphoned off” to the tune of Rs430 crore for purchase of properties from Rs 950 crore loan the erstwhile airline had taken from IDBI Bank, were “false and incorrect”.
On its part, the ED questioned Mallya’s locus-standi in making such a plea before the court at this stage. The ED showed to the court an envelope containing details of “siphoned” loan money invested on properties abroad and also the money lying in Mallya’s overseas accounts.
While issuing NBW against Mallya, the PMlA court rejected KFA’s plea challenging the ED’s charge Mallya had “siphoned off” loan money to the tune Rs430 crore for purchase of properties abroad.
Official sources said that armed with NBW issued against Mallya, the ED would later this week ask the Interpol wing of the CBI to issue a Red Corner notice against the debt-trapped businessman, who is believed in the United Kingdom.
Earlier on Monday, Badeka had told the special court that “no funds disbursed to KFA by IDBI have been wrongly utilised or utilised for the purpose other than legitimate business purpose” and urged the court to wait for submission of the detailed explanation of the utilisation of the proceeds of the IDBI Bank loan with supporting documentary evidence before passing any order on the application of ED seeking NBW.
The company counsel had said that the collation of the detailed explanation of the utilisation of proceeds of the IDBI loan disbursed to KFA together with relevant supporting documents, including copies of swift messages giving details of foreign remittances, was at an advanced stage and would be furnished to the ED in the next few days.
“Suffice it to say that no funds disbursed to KFA by IDBI have been wrongly utilised or utilised for the purpose other than legitimate business purposes, expenses of KFA or have been diverted in any manner by Mallya for his personal benefit or gain”, the KFA had said in its plea.
It may be recalled that in a submission made before the PlMA court had on Saturday alleged that Mallya had “siphoned” off to the tune of Rs430 crore for purchase of a property from the loan of Rs 950 crore Kingfisher had taken from IDBI Bank.
Making a case for issuance of NBW against Mallya, ED Counsel Hiten Venegaonkar had told the court: “We have stumbled upon the money trail and found that of the money he borrowed (Rs 950 crore), a portion (Rs 430 crore) had been used to buy a property outside India. He wants to avoid probe and therefore Non Bailable Warrant may be issued to compel his presence by bringing him from UK”.
The ED’s counsel had charged that Mallya, whom the ED had issued three summons on March 10, March 18 and April 2 asking him to appear in the case, had failed to appear before the investigating agency, thus delaying the progress of investigations.
In his response to the last summons, Mallya had on April 9 informed the Investigating Officer (IO) of the case here that he was not able to depose personally as scheduled citing the ongoing legal proceedings going in the Supreme Court over settlement of loans.
Quoting the SC verdicts, the ED counsel had told the special court at the last hearing that only the investigating agency could decide how, when, where and on which day an accused or suspect should appear for the probe. “Therefore, Mallya’s submission that he is cooperating and will himself decide when to appear before ED is a baseless argument and is intended to delay probe,” Venegaonkar had said.
With the recent suspension of his diplomatic passport and issuance of NBW against him on Monday, the ED has covered considerable ground since it registered a money laundering case against Mallya and others in the IDBI loan money laundering case.
The agency is investigating the overall financial structure of the now defunct Kingfisher Airlines and is also looking into any payment of kickbacks to secure loan.
The ED 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. It is also looking for details of overseas and domestic assets of Mallya and his company officials, in coordination with central security agencies and the CBI.
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 made official requests to the Income Tax and Service Tax departments and the Serious Frauds Investigation Office (SFIO) seeking details of their investigations against the now-defunct Kingfisher Airline in the past.