A special court, set up to try cases under the Prevention of Money laundering Act (PMlA), on Saturday reserved its ruling till April 18 on a plea by the Enforcement Directorate (ED) seeking Non-Bailable Warrant (NBW) against Vijay Mallya, after the ED alleged that he had diverted funds to the tune of Rs430 crore for purchase of a property from the Rs950 crore loan Kingfisher had taken from IDBI Bank.
On Monday, Special PMlA court judge PR Bhavake will pass the order on a plea by the ED seeking NBW against him in connection with a money laundering probe in the over Rs900 crore IDBI loan fraud case.
Making a case for issuance of NBW against Mallya, ED counsel Hiten Venegaonkar told the special PMlA court: “We have stumbled upon the money trail and found that of the money he borrowed (Rs950 crore), a major portion (Rs430 crore) had been used to buy a property outside India. He wants to avoid probe and therefore NBW may be issued to compel his presence by bringing him from the UK”.
The ED’s counself said three summons had been issued by the PMlA court against Mallya this year on March 10, March 18 and April 2 asking him to appear in the case. However, Mallya replied in emails to ED that he could not appear because of his commitments in Europe and also because he was busy trying to arrange money to pay off his debts by a one-time arrangement.
Venegaonkar told the court that in his emails, Mallya had sought time to appear and he was delaying the progress of investigations by not coming before ED, a situation that warranted issuance of NBW against the head of the now-defunct Kingfisher airlines.
He also brought to the court’s attention to the fact that even in FERA cases, the Supreme Court had observed that Mallya was using evasive tactics by not appearing before the investigating agency.
Venegaonkar went onto cite apex court’s verdicts to state 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,” the ED Counsel told the court.
The ED had on Friday moved the PMlA court for issuance of NBW against Mallya on the heels of the Union government suspending his diplomatic passport and even threatened to revoke it if he did not come to India and cooperate with the investigations.
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 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.