Mallya’s personal guarantees raised risk factor: Banker
LONDON: An expert in banking and finance told a London court hearing controversial businessman Vijay Mallya’s extradition case that his exposure to risk increased when he gave personal guarantees to secure loans from IDBI and SBI.
Deposing on Day three of the trial, expert witness Paul Rex explained to the court various intricacies of the banking sector in India, recalling that he had previously deposed in a case involving SBI and BCCI.
The pre-lunch session was devoted to going through assessments made by SBI and IDBI while extending large loans to Mallya’s Kingfisher airlines. They also included estimates of the aviation industry at the time the loans were secured, in 2009, 2010 and 2012.
Mallya is facing charges of financial irregularities worth nearly ₹9,000 crore in India. The Indian side has presented in the Westminster magistrates court what it called his “three chapters of dishonesty” on the loans.
Among the issues explained by Rex and Mallya’s lawyer Clare Montgomery are brand value of Kingfisher and negative lien (not disposing off aircraft during the loan period). SBI had a positive assessment of Kingfisher while disbursing the loans.
“Banks behave in a herd-like manner. A big bank like the SBI endorsing a loan application will be taken as a positive step by other banks,” Rex said.
He was due to be cross examined by the Crown Prosecution Service lawyer Mark Summers on India’s behalf later on Thursday.