Fugitive Vijay Mallya Had ₹7,500 Crore In 2017, Enough To Repay Banks: CBI

A Swiss bank estimated fugitive businessman Vijay Mallya’s net worth at ₹7,500 crore in August 2017, the Central Bureau of Investigation said in its third supplementary charge sheet filed in connection with Kingfisher Airlines loan fraud case — pointing out that he had enough funds at his disposal to repay banks from which his airline had borrowed money.

The central agency also claimed that the liquor baron established around 44 entities in the United Kingdom through which he acquired and invested in several properties across Europe.

The last charge sheet filed by CBI before the special CBI court in Mumbai last year became available last week. The charge sheet primarily contained information received by the agency from UK, Mauritius and Switzerland. The charge sheet referred to a letter from CBH (Compagnie Bancaire Helvétique) Bank (a Swiss Bank) in which Mallya had accounts, where bank officials put Mallya’s net worth at arounds $ 1 billion ( ₹7,500 crore approximately in August 2017).

In the supplementary charge sheet, the agency has claimed that Mallya had sufficient funds at his disposal between 2008 and 2014. However, despite repeated promises of equity infusion in Kingfisher Airlines Limited (KAL) to lenders, including IDBI Bank, he didn’t follow through.

Instead, CBI said in the charge sheet, Kingfisher Airlines transferred ₹2418.89 crore (over US$ 500 million) to its own accounts maintained in the UK under the pretext of meeting office and operational expenses between 2008 and 2012. The agency claimed that the funds were diverted to Force India Formula 1Team limited, a racing team owned by Mallya.

The agency had requested the Swiss government to provide details of Mallya’s investments in Swiss banks. The agency claimed that as per his agreement with Diageo PLC, which acquired United Spirits from him, in lieu of stepping down from the position of Chairman of United Spirits Ltd and not competing with Diageo PLC in Asian markets in liquor business, Mallya was to receive $75 million.

Mallya was bound not to alienate this money according to a personal guarantee he gave to IDBI Bank and State Bank of India from which KAL had borrowed money, CBI said, adding that in violation of this , Mallya received the said amounts in his account maintained with Edwards De Rothschild Bank, Switzerland and alienated the asset by transferring it to three private trust accounts established in Switzerland in the names of his three children namely Siddhartha Mallya, Leana Mallya and Tanya Mallya.

The Swiss government has provided details of the bank accounts held by Mallya through several entities which were controlled by him, the charge sheet stated, adding that the money received from Diageo was transferred to these Swiss bank accounts and eventually to other bank accounts for the benefits of his children.

CBI has claimed that Mallya also incorporated Continental Administration Services in the British Virgin Islands, and that this firm managed all the funds received by him from various entities, diverting them to the family trust and accounts opened for the benefit of his children. It was through this entity that Mallya invested ₹80 crore to purchase a house in UK and ₹250 crore to buy one in France.

In the charge sheet, the agency has added Buddhadev Dasgupta, then general manager, large corporate department of the IDBI Bank, as an accused.

According to the charge sheet, even as KAL’s request for a loan was pending with IDBI Bank, the company sought a short-term loan of ₹150 crore in October 2009. Dasgupta submitted a memorandum to the credit committee for sanction of this loan. CBI’s investigation revealed, the charge sheet claims, that this submission was different from the memorandum found on the record of the bank. The changes made in the memorandum subsequently led to separation of the loan of ₹150 crore from the proposed loan of ₹750 crore thereby increasing the loan given to Kingfisher.

Mallya fled India in March 2016, and while Indian agencies have won their extradition case against him in the UK, he has applied for asylum in that country — which means he cannot be extradited till the government considers his request.