India: Fresh charges filed against United Breweries’ Vijay Mallya

The pressure is mounting on the beleaguered Vijay Mallya, the former head of India’s United Spirits, with India’s Enforcement Directorate filing fresh charges accusing him of defrauding a consortium of banks out of a further £450 million, The Drinks Business reported on June 19.

Mallya fled to Britain in March 2016. While he is fighting extradition to India on charges of fraud and money laundering associated with the collapse of his Kingfishers Airlines in 2012, the High Court in London has ordered him to pay a minimum of £200,000 towards the costs incurred by 13 Indian banks in their battle to recover £1.145 billion from him.

That may prove somewhat difficult as the same court has refused to overturn a worldwide order freezing Mallya’s assets up to that sum and he is allowed £18,000 a week from which to fund his lifestyle.

Meanwhile India’s Enforcement Directorate has filed fresh charges against Mallya, his bankrupt KIngfisher Airlines and his main holding company United Breweries Holdings alleging money laundering and defrauding a consortium of nationalised banks of a further £450 million between 2005 and 2010.

The charges says that Mallya and his two firms fraudulently diverted the loans to his Force India UK-based F1 grand prix team and the Royal Challengers Bangalore Indian Premier League cricket franchise. The allegations also say that he used the monies to fund private jet sorties. The ED’s fresh charge sheet against Mallya and his firms is likely to pave the way for him to be declared “fugitive” under a new Indian law.

If that happens, the financial enforcement agency will immediately seek court permission to “confiscate” £1.145 billion worth assets from the beleaguered businesses.

Mallya is due back at Westminster Magistrates’ Court in London next month for the next hearing in his extradition case.

A hearing for closing arguments was scheduled for July 11 but is now likely to take place on July 31.

The former Kingfisher Airlines boss remains on bail since his arrest on an extradition warrant in April last year. The Crown Prosecution Service believes it has established a prima facie case of fraud against him and that there are no bars to his extradition to face the courts in India. He has already been found guilty of contempt by India’s Supreme Court.

Mallya’s lawyers claim the criminal charges against him are “without substance” and “politically motivated”.

They have also challenged the case on human rights grounds, questioning the conditions at Arthur Road Jail in Mumbai, where he will be held if extradited.

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