40% losses in Mallya, PNB cases recovered
NEW DELHI: The Enforcement Directorate (ED) has handed over attached/seized assets worth ₹9,041 crore, mostly in shares, to the public sector banks cheated by fugitive businessmen Vijay Mallya, Nirav Modi and Mehul Choksi, the central agency said in a statement on Wednesday.
The amount represents 40% of losses of the combined fraud value – ₹22,585 crore -- committed by the three fugitives, whose extraditions are currently being pursued by Indian government.
Separately, assets worth ₹329 crore belonging to Nirav Modi have already been confiscated in July 2020 and realised in the government exchequer.
The agency said it has so far attached and seized assets worth ₹18,170 crore (80.45%) in the two cases – Punjab National Bank scam involving Nirav Modi and Mehul Choksi, and Kingfisher Airlines fraud involving former liquor baron Vijay Mallya -- out of total ₹22,585 crore they owe to the banks. Out of this, properties worth ₹969 crore have been attached in foreign countries, including the UK, the US, France and the UAE.
While PNB was allegedly cheated by Modi-Choksi duo of ₹13,578 crore, Mallya fled India after allegedly cheating multi
ple banks of ₹9,000 crore.
ED’s statement comes after the realisation of attached shares worth ₹5,824 crore belonging to United Breweries Ltd by Debts Recovery Tribunal (DRT) on Wednesday on behalf of a State Bank of India-led consortium that had lent money to Mallya.
The central agency had recently transferred shares worth ₹6,624 crore of UBL attached by it to SBI. The remaining shares of ₹800 crore will be sold by the DRT on June
25, people familiar with the development said.
Earlier, the banks had recovered ₹1,357 crore by a similar sale of shares in the case against Mallya and his now defunct Kingfisher Airlines, ED said. Similarly, another ₹1,060 crore worth of assets were restituted to the banks earlier in the probe against Nirav Modi.
Reacting to the developments, Union finance minister Nirmala Sitharaman tweeted: “Fugitives & economic offenders will be actively pursued; their properties attached & dues recovered.”
ED said that it unearthed the money trail by exposing a web of domestic and international transactions and stashing of assets abroad of the three accused. The investigation revealed that the three used dummy entities controlled by them for rotation and siphoning off the funds provided by the banks, it said.
The agency also said that extradition requests have been sent to countries where the three accused are living. While Mallya and Modi live in London, Choksi chose Antigua and Barbuda after running away from India in 2018.
Mallya, after his extradition was ordered by the UK high court last year, has been denied permission to file appeal in the UK Supreme Court but he is learnt to have applied for asylum there.
A UK magistrate’s court, in February this year, had ordered extradition of Modi, who is lodged in a jail on the outskirts of London since his arrest in March 2019, which was also confirmed by the UK home secretary but he has gone on to appeal against it.
Choksi is also fighting extradition in the Antigua and Barbuda high court. He went missing from the island on May 23 this year and was found in Dominica the next day. While his lawyers have alleged he was abducted by Indian and Antiguan police officers, he has been charged for illegal entry in Dominica. The Indian government has already filed affidavits in Dominica high court seeking his direct deportation to New Delhi.
Advocate Vijay Aggarwal, who represents Choksi, said on Wednesday: “In Mehul Choksi case, ED has indeed attached assets much more than the money due to the banks. Further, if one looks at the principal amount and the kind of haircut banks are taking in National Company Law Tribunal or otherwise in OTS (onetime settlement), in this case banks will recover more than hundred percent of the principal
as well as interest.”
“However, for the people who have been declared fugitive, I have my doubts as to how will banks get the money as in the Fugitive Economic Offenders (FEO) Act, there is no provision to give money to the victims and it is confiscated by the central government.”
Mallya’s lawyers could not be reached for comment.