Vijay Mallya diverted Rs 430 crore for purchase of a property abroad from the Rs 950 crore IDBI loan for his Kingfisher Airlines, the ED alleged on Saturday before a special court which reserved its order till April 18 on the agency’s plea for a NBW against the beleaguered businessman.
The order on the Enforcement Directorate’s (ED) plea for a Non Bailable Warrant (NBW) in the money laundering case involving Mallya’s alleged defrauding of the IDBI was reserved by special Judge P R Bhavake who hears cases filed under the Prevention of Money Laundering Act (PMLA).
Mallya, now in Britain, is charged with siphoning off a portion of money involving IDBI loan of Rs 950 crore, which he had borrowed for Kingfisher Airlines.
“We have stumbled upon the money trail and found that of the money he borrowed (Rs 950 crore), a portion (Rs 430 crore) had been used to buy a property outside India. He wants to avoid probe and therefore Non Bailable Warrant may be issued to compel his presence by bringing him from UK,” ED Counsel Hiten Venegaonkar told the court.
IDBI’S money was thus used for some purpose other than the one for which the loan had been given, he said.
Venegaonkar said three summons had been issued by the PMLA court against Mallya this year on March 10, March 18 and April 2 asking him to appear in the case. However, Mallya replied in e-mails to ED that he cannot appear because of his commitments in Europe and also because he was busy trying to arrange money to pay off his debts by a one-time arrangement.
In all these e-mails, Mallya sought time to appear and he was delaying the progress of investigations by not coming before ED, the agency’s lawyer told the court while justifying issuance of a Non Bailable Warrant against him.
The ED counsel argued that even in FERA cases, the Supreme Court had observed that Mallya was using evasive tactics by not appearing before the investigating agency.
He further cited Supreme Court judgements to point out that only the investigating agency can decide how, when, where and on which day an accused or suspect should appear for the probe. Therefore, Mallya’s submission that he was cooperating and would himself decide when to appear before ED was a baseless argument and was intended to delay probe.
The court was hearing an application moved by ED which is probing money laundering charges against the flamboyant 60-year-old liquor baron and seeking NBW against him.
Kingfisher Airlines has allegedly defaulted on loans of over Rs 9,400 crore obtained from various banks and Mallya has left India for Britain where he is staying with his family.
The Union Government had on Friday suspended Mallya’s diplomatic passport and even threatened to revoke it if he does not come to India and cooperate with the investigations.
The ED lawyer informed the court that an offence was registered by CBI against the accused on July 29 last year and an FIR was filed by CBI on January 25 this year under sections 120-b (Conspiracy) and 409 (criminal breach of trust) of IPC and under the PMLA.
Venegaonkar said Mallya’s conduct and his replies to ED summons were questionable. Time and again he requested adjournment of the court proceedings and the probe saying he was not in the country. This conduct was highly deplorable as he was trying to avoid the summons, the lawyer said.
IDBI extended credit to Mallya’s company on the basis of collateral security which was a personal bond issued by Mallya himself. Besides, the loans were given on the strength of the Kingfisher’s brand value which has now been lost.
The petition filed by Ram Kumar Pandey, Assistant Director, Enforcement Directorate, Mumbai, submitted that scrutiny of loan fund utilisation statement of IDBI had revealed that an amount of Rs 423 crore (approx) had been remitted out of India on account of aircraft lease rent, import of spare parts and aircraft maintenance services.
The ED official said major recipients of this amount have been identified, along with their bank details. FIU (Financial Intelligence unit) reference has been prepared and sent to various countries such as Ireland, UK and France to verify the veracity of transactions effected by Kingfisher Airlines in respect of payments outside India.
“From the people ED has interrogated a specific input has come on record stating that Mallya has acquired several properties in foreign countries. There is a possibility that these properties are acquired from the proceeds of crime involved in the present offence and it is feared that Mallya may alienate and/or dispose of the same by creating hurdles in investigations and frustrating proceedings under PMLA,” ED’s petition alleged.