ED moves court to declare Mallya a fugitive, seeks to freeze assets
Investigative agency files for confiscation of properties worth about ₹12,500 crore
MUMBAI/NEW DELHI: The Enforcement Directorate (ED) has moved court against Vijay Mallya to declare the businessman a “fugitive economic offender.” It’s the first instance of the agency seeking to get a suspect in an economic offence declared a fugitive after the promulgation of the Fugitive Economic Offenders Ordinance in April.
Once he is declared a fugitive economic offender, ED, which investigates violations of foreign exchange rules and money laundering, will be able to freeze assets directly or indirectly held by Mallya such as benami properties, or assets held in another person’s name or a fictitious name.
ED, which filed the application in a special court in Mumbai, said the “estimated value of properties proposed for confiscation is to the tune of ₹12,500 crore approximately, which includes immovable properties as well as movable properties in the form of shares.”
Mallya, a former liquor baron, flew out of India to London in March 2016 as creditors of his Kingfisher Airlines zeroed in on him to recover more than ₹9,000 crore of dues owed by the defunct airline.
ED claimed hat Mallya “was alienating his assets by disposing of the properties held in the name of the companies which were indirectly controlled by him and also was getting funds outside India by way of having a deal with Diageo Plc.”
Mallya flew to London within days of signing a $75 million dolhe lar sweetheart deal with Diageo, under which he agreed to resign as non-executive chairman of United Spirits Ltd, a company once controlled and which was acquired by the British spirits maker.
As per the process, the court will now issue summons to Mallya to appear before it, and he will be declared a “fugitive economic offender” if he fails to turn up.
A “fugitive economic offender” is a suspect who has fled India to avoid facing crimi- nal prosecution for an offence that is to the tune of more than ₹100 crore and involves defrauding creditors and money laundering, among other crimes.
In its application before the court, ED said Mallya “had no intention to repay the loans from the start and though he and Ms UBHL (United Breweries Holdings Limited) had substantial assets that were sufficient to repay the loans, they intentionally withheld the details from the banks.”
The agency said that it had already attached assets of Mallya worth ₹8,040 crore for money laundering.
ED has filed two charge sheets against Mallya for defaulting on loans owed to IDBI Bank and a consortium of creditors led by State Bank of India. Based on the ED action, nonbailable warrants have been issued against Mallya.
Top ED officials said on condition of anonymity that the agency will now move court against jewellers Nirav Modi and his uncle Mehul Choksi to get them declared as fugitive offenders.
The two, who are also abroad, are the main suspects in a ₹14,000 crore fraud at Punjab National Bank.