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PSU banks back in UK court over Mallya’s non-payment of debt

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A consortium of public sector banks led by State Bank of India (SBI) are back in the UK high court to seek a bankruptcy order against liquor tycoon Vijay Mallya over the alleged unpaid debt of around £1.145 billion (about ₹9,000 crore).

Judge Michael Briggs is presiding over a hearing in the insolvency division of the court in London this week in relation to a bankruptcy petition filed by the banks back in 2018 in their attempt to recoup unpaid debt accrued by the now-defunct Kingfisher Airlines.

A previous UK High Court ruling had refused to overturn a worldwide order freezing Mr. Mallya’s assets and upheld an Indian court’s ruling that the consortium of 13 Indian banks were entitled to recover funds amounting to nearly £1.145 billion. The banks then launched efforts to recover dues as part of the freezing order, with the bankruptcy petition aimed at seizing UK-based Mallya’s assets to recover the dues.

Besides SBI, the 13 Indian banks include Bank of Baroda, Corporation bank, Federal Bank Ltd, IDBI Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Punjab & Sind Bank, Punjab National Bank, State Bank of Mysore, UCO Bank, United Bank of India and JM Financial Asset Reconstruction Co. Pvt Ltd.

They have secured follow-on High Court orders to recover some of the funds owed to them as a result of Kingfisher Airlines’ unpaid loans. Also, in July, the banks had won a High Court battle to access documents they were after to establish the true ownership of assets they believed were linked with the embattled liquor tycoon.

Mr. Mallya’s legal team has argued that the petition for bankruptcy in the UK should be dismissed because the banks are pursuing the same debt through the Indian courts. They have also sought a stay on proceedings until his appeal against his extradition order, scheduled in the Royal Courts of Justice in London, is heard in February next year.

Meanwhile, Mr. Mallya remains on bail pending the appeal hearing in the extradition proceedings brought by India in relation to charges of fraud and money laundering amounting to an alleged ₹9,000 crores. He had been arrested on an extradition warrant back in April 2017 and has been fighting his extradition in the UK courts since then.

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Printable version | Jan 23, 2020 11:25:53 PM | https://www.thehindu.com/news/national/psu-banks-back-in-uk-court-over-mallyas-non-payment-of-debt/article30275239.ece

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