Mallya’s lawyer tears into govt’s extradition plea
Businessman Vijay Mallya’s lawyer tore into New Delhi’s allegations of fraud on Tuesday, the second day of an eight-day extradition hearing of the chairman of the now-defunct Kingfisher Airlines (KFA).
The Indian government claimed there was a prima facie case of Mallya having committed fraud in KFA procuring a loan of ~750 crore from IDBI Bank in 2009. KFA went down, thereby burdening the company with debts of around ~5,500 crore. Indian authorities say with interest charges and penalties, KFA now owes ~9,000 crore.
Clare Montgomery, appearing forMallya, opened her argument by saying “there is no evidence” in the case advanced by the Indian government. She added: “The evidential content of the fraud case is zero.” She went on to ask the chief magistrate of the Westminster court presiding over the case, Emma Arbuthnot: “Could a reasonable jury reach a conclusion of fraud or was it a business failure?” She herself answered by saying: “It was rational and reasonable to reach a conclusion it was a business failure.”
Montgomery lived up to her reputation to being a Portia of the London bar, a specialist in extradition matters. She had won the case which ordered the Wikileaks founder, Julian Assange, to be extradited to Sweden, before he took shelter at the Ecuador embassy in London and was given diplomatic immunity. She continued that India had not levelled charges against Mallya “honestly or accurately” and did so “without a shred of evidence”.
The prosecution had accused Mallya of “mala fide” intentions in KFA seeking the loan of ~750 crore from IDBI Bank and misusing the money. Montgomery responded: “It is evidentially unsupported that he palmed off losses on to bankers.”
“It reflected,” she said, “a lack of appreciation of the rights of shareholders. It is economically and legally impossible”.
She contended the promoters’ losses stood at ~1,652 crore before KFA sought a loan of ~2,000 from a consortium of Indian public sector banks, including State Bank of India and UCO Bank. By taking the facility and not being able to repay, their liabilities increased by thousands of crores, she maintained. Thus, the Indian government’s was “not a credible case to advance”.
Montgomery explained the airline business was dependent on currency fluctuations, price of aviation fuel, competition, over capacity and the global economic climate. In India, she stated airlines “cannot hedge their fuel costs” because there’s a “monopoly on domestic supply”.