Trouble mounts for Vijay Mallya as ED books him for money laundering

MUMBAI: The Enforcement Directorate (ED) has actually registered a case under the Prevention of Money Laundering Act (PMLA) versus Vijay Mallya and top executives of long-defunct Kingfisher airlines in a bank fraud case.

The ED has actually named 7 persons, including Mallya, in the money laundering case.

The ED case is based on a CBI case registered versus Mallya and others in a bank fraud case.

Recently, the country’s largest lender, State Bank of India, has actually approached the Debt Recovery Tribunal (DRT) seeking arrest of Vijay Mallya in a bid to recover loans to Kingfisher Airlines, which was promoted by the liquor baron.

A defiant Vijay Mallya had said on Sunday that he was making efforts to reach a “one-time settlement” along with banks through additional payments to the lenders.

Rejecting allegations that he is an “absconder” in the wake of his statement to spend more time in England after signing a “sweetheart” deal along with Diageo, the liquor baron said he will continue to cooperate along with investigative agencies related to the loans provided by banks to long-defunct Kingfisher Airlines.

Mallya, who has actually agreed to step down as chairman of United Spirits Ltd in return for USD 75 million to be paid by Diageo, also insisted that he is not a “borrower or a judgment defaulter” and he has actually challenged the “willful defaulter” tag by some banks, which he alleged didn’t go after borrowers who “owe much more than the amount allegedly owed by Kingfisher Airlines”.

He also alleged that SBI, which has actually dragged him to Debt Recovery Tribunal (DRT) seeking his arrest and seizure of his passport to claim his Rs 515 crore sweetheart deal to exit United Spirits, was well aware of the financial pressure of Kingfisher Airlines for a long time and the same was reported by the state-run lender to RBI way back in January 2012 – months before the once-luxurious air carrier was grounded in October that year.

Mallya, who was widely known as ‘King of Good Times’ and his lavish parties before his businesses started plunging into one after another crisis resulting in sale or closure of various companies, also said that while banks would certainly eventually recover a “substantial part of their debt”, the loss for his group is permanent.

“I have actually been most pained as being painted as an absconder – I have actually neither the intention nor any reason to abscond. I have actually been a non-resident for almost 28 years and the Reserve Bank of India has actually acknowledged this in writing,” he said in the statement.

Mallya says he is not wilful defaulter

Vijay Mallya, the former United Spirits Ltd (USL) chairman, said it was unfortunate he was singled out as a wilful defaulter when larger borrowers who owe much more to the banks have actually not been done so.
Mallya has actually come under an intense media glare in recent weeks after a deal he inked along with Diageo, the current controlling owner of United Spirits that was set up by his family but had to be sold off due to financial pressure in his UB Group.
After a year-long boardroom battle, Mallya last month agreed to quit as chairman and director of United Spirits while Diageo has actually agreed to pay him USD 75 million (Rs 515 crore) and shift base largely to the UK.
Recently, former staff and customers of KFA have actually also come out in the open seeking action versus Mallya, while at least three banks have actually declared him, his group holding company UBHL and the airline as wilful defaulters.

(along with inputs from agencies)

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