Mallya Used IDBI Loans to Fly His Pri­vate Jet, Says CBI

CHARGE SHEET Liquor baron, other ac­cused KFA of­fi­cials used funds to pay off other lenders

The Economic Times - - Companies: Pursuit Of Profit - Saloni.Shukla @times­group.com

Mum­bai: In­dia’s fed­eral in­ves­ti­ga­tor has charged em­bat­tled bil­lion­aire Vi­jay Mallya with us­ing IDBI Bank loans to fly his pri­vate jet and pay off other lenders, high­light­ing the mis­use of bor­rowed money by the liquor baron’s moth­balled King­fisher Air­lines that was once billed among the finest to fly South Asian skies.

“Vi­jay Mallya and other ac­cused KFA (King­fisher Air­lines) of­fi­cials di­verted sig­nif­i­cant por­tion of the loan for pur­poses other than those for which the loans were sanc­tioned,” the CBI has said in its charge sheet on the .₹ 950-crore loans the car­rier had raised between 2009 and 2010 from IDBI Bank. Nine, in­clud­ing five IDBI Bank ex­ec­u­tives, are in ju­di­cial cus­tody un­til Fe­bru­ary 7.

Ac­cord­ing to the CBI, the air­line had told a con­sor­tium of lenders, in­clud­ing IDBI Bank, it needed .₹ 2,000 crore to pay lease ren­tals of air­craft, clear dues to fuel sup­pli­ers and the had sanc­tioned three loans worth 150 crore, 200 crore and 750 crore between 2009 and 2010 to King­fisher

IDBI BANK

has said 200 cr was used to re­pay an ear­lier IDBI loan of 200 cr availed on Nov 6, 2009

THE CBI

state-run air­ports op­er­a­tor, and pay for en­gi­neer­ing and main­te­nance of air­craft. IDBI Bank had sanc­tioned three loans worth .₹ 150 crore, .₹ 200 crore and .₹ 750 crore between 2009 and 2010 to King­fisher Air­lines, dis­burs­ing .₹ 950 crore in to­tal to the car­rier. The CBI has said .₹ 200 crore was used to re­pay an ear­lier IDBI loan of .₹ 200 crore availed on Novem­ber 6, 2009, while .₹ 345 crore was utilised to trans­fer funds within In­dia.

The CBI has said that the bulk of the loan amount dis­bursed by IDBI Bank was di­verted by of­fi­cials of King­fisher Air­lines to pay its trade cred­i­tors, ex­tin­guish statu­tory dues, trans­fer to other ac­counts of King­fisher Air­lines with Axis Bank and Bank of Bar­oda for set­tling their li­a­bil­i­ties in such banks, and also for pay­ment of loans/lease rental for the cor­po­rate jet ac­quired by the com­pany for Mallya’s per­sonal use.

The CBI also said that King­fisher Air­lines, de­spite col­lect­ing taxes from ser­vice providers and em­ploy­ees, had failed to pay the In­come Tax depart­ment on time. When IDBI Bank sanc­tioned the loan of .₹ 750 crore, King­fisher Air­lines re­leased three cheques in favour of the In­come Tax Depart­ment from the pro­ceeds of the loan. “The pay­ment to I-T depart­ment nei­ther formed part of the loan ap­praisal note nor was men­tioned any­where in the re­quest let­ters seek­ing the loan,” the CBI said in the charge sheet.

The agency also noted that while King­fisher Air­lines had claimed that it would use loan pro­ceeds for pay­ment to­wards AAI and Ban­ga­lore In­ter­na­tional Air­port, the funds were routed to ac­counts held with Bank of Bar­oda. “Dur­ing the course of the in­ves­ti­ga­tion, emails to the ef­fect that ac­cused Vi­jay Mallya was per­son­ally con­trol­ling the util­i­sa­tion of funds re­leased by var­i­ous banks in­clud­ing IDBI Bank have been seized,” the CBI said in the charge sheet.

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