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