ED seeks fugitive offender tag for Vijay Mallya in first case under new legislation

First case in newly promulgated ordinance

Vijay Mallya

The Enforcement Directorate (ED) on Friday filed an application at the Prevention of Money Laundering Act (PMLA) Court to declare Vijay Mallya a fugitive economic offender and sought orders to confiscate all his properties, estimated to be worth about ₹ 12,500 crore.

Separate complaints

 This is the first case under the newly promulgated Fugitive Economic Offenders Ordinance. The agency filed two separate complaints registered under the PMLA for investigation of money laundering against Mr. Mallya, Kingfisher Airlines Ltd. (KAL), United Breweries Holdings Ltd. and others. The court has taken cognisance of both the cases and issued fresh non-bailable warrants against Mr. Mallya.

The ED said in a release, “The extradition hearings against Mr. Mallya conducted before the Westminster Court, London, is almost complete.” The release adds that instances were noticed wherein Mr. Mallya alienated his assets by disposing of properties held in the name of companies indirectly controlled by him, and also by receiving funds outside India in a deal with Diageo Plc (an MNC manufacturing liquor). 

Intentionally withheld

These details were intentionally withheld from the banks, and later, alienated some assets. Attempts were made to obfuscate banks from enforcing guarantees. The fraudulent activities were undertaken from the start of the loan being availed.

There was a conspiracy by Mr. Mallya and the officials of KAL and others to project and have ‘Brand Value’ accepted as collateral security in spite of it being a “hypothetical asset” and suffering from deficiencies. They also deliberately avoided submitting the valuation report by another brand valuer.

The ED has identified and attached properties held by Mr. Mallya through a maze of companies indirectly controlled by him via his employees and ex-employees, and “dummy directors”. Several instances of siphoning and diversion of funds by KAL were noted. 

The agency also stated that, initially, properties worth ₹ 807.82 crore (having a market value of ₹ 1,411 crore at the time of attachment) were provisionally attached. This was confirmed by the adjudicating authority. Thereafter, another provisional attachment order was issued for attaching properties worth ₹ 4,234 crore, which had a market value of ₹ 6,629 crore at the time of their attachment.