The Enforcement Directorate on Saturday provisionally attached movable and immovable properties having market value of Rs.1,411 crore of businessman Vijay Mallya and United Breweries (Holding) Limited, of which he is the chairman, in connection with a money laundering case against him.
The attachment has been done as part of investigations into the alleged Rs.900-crore IDBI Bank loan default case.
“During investigations, we found that some of the properties were being disposed of by the accused. Therefore, to ensure that further proceedings do not get frustrated, properties equivalent to the proceeds of crime of Rs.807 crore, having current market value of Rs.1,411 crore, have been provisionally attached,” said a senior ED official.
The assets include bank balance of Rs.34 crore, two flats in Bengaluru and Mumbai measuring 2,291 and 1,300 square feet, a 4.5-acre industrial plot in Chennai, coffee plantation land in Coorg spread across 28.75 acres, besides the residential and commercial constructed areas in UB CITY and Kingfisher Tower in Bengaluru, spread in 8.4 lakh square feet.
After the Central Bureau of Investigation registered a case on July 29 last year against Mr. Mallya, his company Kingfisher Airlines and unknown IDBI Bank officials, the ED registered a money laundering case on January 25.
Investigations revealed that loan amounting to Rs.864 crore was sanctioned to the airlines against the collateral security of Kingfisher brand, corporate guarantee of UBHL and personal guarantee of Mr. Mallya.
“Of the total amount, Rs.807 crore remained unpaid. The corporate loan was sanctioned and disbursed despite weak financials, negative net-worth and low credit rating of the company. The loans were cleared despite the fact that the company being a new client did not satisfy the norms stipulated in the corporate loan policy of the bank,” said the official.
According to the Directorate, Kingfisher Airlines and its officials conspired to get the loan sanctioned without due diligence and the airlines diverted the funds.
“The loan was sanctioned in an extraordinary haste without independent verification of the quality and value of the said security. Subsequently, to avoid payment of the dues, corporate guarantee and personal guarantee rendered by UBHL and Mr. Mallya were challenged by them in Bombay High Court on the grounds of coercion and undue pressure,” said the official.
The ED found that from very beginning the airlines allegedly defaulted in repayment of loan, causing wrongful loss to IDBI Bank. “Funds to the tune of Rs.423 crore were remitted outside the country on the pretext of aircraft lease rentals and other expenditures. However, no supporting documents have been furnished so far to substantiate the claims, leading to the conclusion that part of the loan amount was siphoned off abroad in a calculated and pre-designed manner," the agency alleges.
The agency said Mr. Mallya has held a number of movable and immovable properties in India and abroad through his various companies established by him and through his office personnel. It is alleged that they were controlled, directly or indirectly, by him.
Mr. Mallya flew out to the United Kingdom on March 2, following which the Ministry of External Affairs revoked his diplomatic passport on ED’s request. While a non-bailable warrant is pending against him, a request has also been sent to the Interpol to issue a Red Notice against him. Indian agencies had earlier attempted to get him deported from the UK, however, the request was denied citing technical reasons. Efforts are now under way to initiate extradition proceedings against him.
Earlier this week, the agency also approached the court seeking that Mr. Mallya be declared a Proclaimed Offender under the Criminal Procedure Code. The move is also expected to help strengthen the case for his extradition.