ED charges Mallya, IDBI officials in ₹950-crore loan default case
Enforcement Directorate (ED) filed a charge sheet against Vijay Mallya and eight others, including IDBI officials on Wednesday, in a ₹950-crore loan default case. The charge sheet alleges part of the loan has been siphoned off abroad in a calculated and premeditated manner.
The charge sheet was filed in the special Prevention of Money Laundering Act (PMLA) court.
The agency alleged the loan transaction between the now defunct Kingfisher Airlines (KFA) and IDBI bank was in contravention of established industry practices. “The said corporate loan was sanctioned and disbursed despite weak financials, negative net-worth, negative debt-to-equity ratio and low credit rating of the borrower company,” said a senior ED officer, while detailing the contents of the charge sheet.
“This shows the connivance between Mallya and the bank officials,” said the officer, adding, “IDBI Bank failed to exercise due diligence.”
The charge sheet is seen as a move that will make India’s case for Mallya’s extradition stronger. “Even though he [Mallya] had money, he kept it abroad so that he continues to enjoy the good times at the cost of the public sector bank,” said the officer.
ED charge sheet notes that the loan was sanctioned in three parts. The first short-term loan was for ₹150 crore, the second ₹200 crore and the last disbursement was for ₹700 crore, of which ₹200 crore was subsumed, stated the charge sheet. “The first shortterm loans was cleared in a day after a meet between Mallya and IDBI Bank ex-chairman Yogesh Agarwal, who is also an accused in the case,” said the officer.
The charge sheet revealed ₹417 crore was remitted outside the country under the pretext of lease rental payment and other miscellaneous payments. Moreover, the ED alleged the brand valuation of KFA was wrong. “KFA’s brand valuation was supposed to be used for their internal review, but was presented to IDBI bank,” said the officer.
The charge sheet stated some payments were made to sister companies such as ₹50 crore to Mallya’s Formula-1 team and an additional ₹100 crore to other sister-concern companies.