The Enorcement Directorate (ED) on Saturday attached properties worth Rs 1,411 crore of Vijay Mallya, chairman of the now defunct Kingfisher Airlines Ltd and UB Holding in connection with a money laundering probe in the Rs 900 crore IDBI loan fraud case.
The agency, according to ED sources, has provisionally attached eight immovable properties of Mallya and UB Holding and one bank account of Mallya in Laxmi Vilas Bank. The bank account has a balance of Rs 34 crore. The other assets attached include one flat each in Bengaluru and Mumbai (2,291 sq ft and 1,300 sq ft respectively), 4.5 acres of industrial plot in Chennai, 28.75 acres of coffee plantation in Coorg and residential and commercial constructed area in UB CITY and Kingfisher Tower in Bengaluru (measuring up to 840,279 sq ft).
“With this, we have attached all the domestic properties of Mallya which were not attached by other agencies and banks,” said a senior ED official. Earlier on June 10, the agency had moved a special court in Mumbai to declare Mallya a proclaimed offender.
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The agency in its plea has said that Mallya has failed to respond to the notices and summons and has not appeared before the ED. The ED had on April 19 obtained a non-bailable warrant against Mallya after he failed to appear. The court which hears cases pertaining to Prevention of Money Laundering Act (PMLA) will pronounce its order on June 13. If the court declares Mallya a proclaimed offender, it will strengthen ED’s case for his extradition from the UK, sources said.
ED, which has already questioned several IDBI Bank officials is ascertaining if any of the officials received “proceeds of crime” for sanction of the loan and in due course may attach their assets, sources said.
The loan was sanctioned to KAL against collateral security of Kingfisher Brand, corporate guarantee of United Breweries and personal guarantee of Vijay Mallya. According to ED, this was done “despite weak financials, negative net-worth, low credit rating of the borrower company.”
An ED official said, “the loan was disbursed even though KAL was a new client and did not satisfy the norms stipulated in the corporate loan policy of the bank.”
An ED statement said, “Investigation indicates that KAL and IDBI officials conspired among themselves and got sanctioned and disbursed term loans without conducting due diligence and KAL had diverted the said funds. The loan was sanctioned in an extraordinary haste without verifying quality and value of the said security independently.”
“Subsequently, to avoid payment of dues, corporate guarantee and personal guarantee rendered by UBHL and Vijay Mallya were challenged by them before Bombay High Court on the grounds of coercion and undue pressure. It emerged during the investigation that from very beginning KAL defaulted in repayment of loan thereby putting the IDBI Bank to a wrongful loss.”
The agency says that investigations revealed that “KAL had no intent for repayment of loan ab initio”.
“Further, huge funds (Rs 423 crore) out of these loans were remitted outside India on the pretext of aircraft lease
rentals etc but no supporting documents furnished so far to substantiate their bona fide. Therefore not only the said loan was obtained in questionable manner, but part of the loan has been siphoned off abroad in a calculated and pre-designed manner,” an ED statement said.
The ED had on May 12 requested the Interpol to issue a Red Corner Notice (RCN) against Mallya. The UK government had informed India that Mallya cannot be deported as per British laws. The UK, however, has said that it could consider an extradition request for him. The extradition can happen under the 1993 treaty or any other necessary assistance under the Mutual Legal Assistance Treaty (MLAT) signed in 1992 between India and the UK. Mallya’s passport has been revoked by the Ministry of External Affairs.
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