Indian tycoon branded 'fugitive economic offender'

Indian tycoon branded 'fugitive economic offender'

Ruling by special court against Vijay Mallya a first in campaign to crack down on high-profile defaulters

Indian businessman Vijay Mallya speaks to reporters after leaving court in London on Dec 10. He is fighting extradition to India on financial fraud allegations. (AP Photo)
Indian businessman Vijay Mallya speaks to reporters after leaving court in London on Dec 10. He is fighting extradition to India on financial fraud allegations. (AP Photo)

NEW DELHI: Vijay Mallya, the Indian tycoon fighting multiple cases in the UK after defaulting on bank loans, has been declared a “fugitive economic offender” by a special court in Mumbai under a new law.

Mallya is the first person to be declared a fugitive under the new law, which gives authorities greater powers to seize and confiscate assets of economic offenders, according to CNN-News18 and India Today TV. Mallya last month lost a bid to avoid extradition to India from the UK, where he is currently based.

The government of Prime Minister Narendra Modi, which faces a general election this year, has been battling to contain the political damage after 31 Indians linked to fraud cases fled abroad to avoid prosecution. Modi is under pressure to act against wealthy defaulters as banks step up efforts to clean up bad loans, partly by tightening bankruptcy rules.

Mallya left the country in 2016 for England to be closer to his children and has since refused to return. He was arrested in London in April 2017 after a consortium of 17 banks accused him of willfully defaulting on more than 91 billion rupees (US$1.3 billion) in debt accumulated by his Kingfisher Airlines — a full-service carrier he founded in 2005 and shut down seven years later.

A British court on Dec 10 endorsed the Indian government’s request for Mallya’s extradition. The case is now before Britain’s Home Secretary for review and action.

Mallya, who in 1983 became chairman of an alcohol company once led by his father, was a leading figure among India’s business elite. In addition to Kingfisher Airlines, he had an ownership stake in India’s Formula One racing team.

At the December hearing, Judge Emma Arbuthnot said there were substantial misrepresentations in Mallya’s accounting of his financial dealings that gave weight to the Indian government’s request for his return.

She described the 62-year-old Mallya in unusually personal terms, suggesting Indian banks might have been fooled into making bad loans by “this glamorous, flashy, famous, bejewelled, bodyguarded, ostensibly billionaire playboy who charmed and cajoled these bankers into losing their common sense”.

The judge said the tycoon’s companies were in “desperate” financial situations that were concealed from the banks and suggested that time in prison custody might lead Mallya to reduce his alcohol consumption.

Mallya can still appeal the ruling, which was made in Westminster Magistrates’ Court. He remains free on bail, but the judge told Mallya she would “take your money away” if he failed to show up for future hearings.

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