Confirmed: Vijay Mallya has left India on 2 March with $40 mn in pocket; SC issues notice

The Supreme Court on Wednesday issued notice to Vijay Mallya, the business tycoon who owes Rs 9,000 crore (including interest) to a consortium of 17 banks, and sought his reply within two weeks in response to a petition filed by the banks to block him from fleeing the country. Attorney general Mukul Rohatgi, however, informed the court citing CBI input that Mallya has already left the country, confirming the earlier media reports to that effect. “I spoke to the CBI little while ago and it told me that on March 2 he (Mallya) left the country,” Attorney General (AG) Mukul Rohatgi told the bench comprising Justices Kurian Joseph and R F Nariman. The AG said, “Today I submit he (Mallya) should appear before you (SC). We want disclosure. We want to recover money, which is public money.” [caption id=“attachment_2665328” align=“alignleft” width=“380”]  Vijay Mallya. PTI[/caption] After this submission the bench concluded the hearing and dictated the order by issuing notice to Mallya saying, “if he is already out of the country, we will permit you to serve the notice through Indian High Commission at London and also through his official email ID of Rajya Sabha, of which he is a member.” The court has also raised some unsavoury questions to the banks that have approached. It asked why loans were given to Mallya when he was already a defaulter and was facing proceedings in the court of law. During the brief hearing, the AG said that amount of more than Rs 9,000 crore was due to various banks and on one or the other pretext Mallya avoided to settle them. Rohatgi has also submitted before the court that Mallya’s assets abroad are far in excess of the loans taken by him. A rough calculation finds that domestically Mallya has more than Rs 7,000 crore of wealth. There have been various proceedings going on against him in debt recovery tribunals in Bangalore and Goa, he said. When the bench wanted to know what was the petitioner seeking, the AG said there was a need for a garnishee order and there was also a need for disclosure on behalf of Mallya. Rohatgi said the banks were seeking an order that Mallya should appear in person before this court and also sought a direction for freezing his passport. The AG said that Mallya has assets, both movable and immovable, abroad which are far excessive to loans secured by him here. At this, the bench wanted to know how the banks have granted him loan under such circumstances. The AG said the loans were granted keeping in mind that Kingfisher Airlines had a fleet of aircraft as well as brand value and loans were given also on the basis of the logo and the aircraft were attached to the third party. Earlier media report had said that banks may have moved the court too late as Mallya may have already left India, probably with $40 million of the bounty he was supposed to receive from Diageo. “Mallya is believed to have left for a foreign destination a few days ago,” a report in The Times of India says pointing out that the banks may have already been late to move the court. According to the report, a spokesperson of Mallya has told the newspaper that “she had no information about his whereabouts and that he was communicating only through email”. After many years of dilly-dallying it was on Tuesday that 13 banks moved the Supreme Court seeking to block Mallya from leaving the country. The banks were worried that he may leave the country without repaying the huge amount of loan as he expressed his wish to move to the UK last week. He announced his intention to shift to the UK in a statement issued after his deal with Diageo to step down from the chairmanship of United Spirits, a company he sold to the UK major three years back. He was to get Rs 515 crore or $75 million from Diageo as severance package. The State Bank of India, the lead lender in the consortium, had last week moved the Debt Recovery Tribunal in Bangalore claiming first right on the payment and seeking to impound Mallya’s passport. However, the DRT reserved its order and has set the next hearing for 28 March, a good 21 days later. The consortium of banks, meanwhile, filed their appeal in the Court but now it seems this was bit too late. Besides SBI, other banks which have moved the SC are: Axis Bank Limited, Bank of Baroda, Corporation Bank, Federal Bank Limited, IDBI Bank Limited, Indian Overseas Bank, Jammu and Kashmir Bank Limited, Punjab and Sind Bank, Punjab National Bank, State Bank of Mysore, UCO Bank and United Bank of India. The banks have also arraigned firms like Kingfisher Airlines Ltd, United Breweries (Holdings) Ltd, Kingfisher Finvest (India) Ltd, SBICAP Trustee Company Ltd as parties. The plea said the banks “individually” had advanced loans to Kingfisher Airlines Limited and by way of a Master Debts Recast Agreement (MDRA), executed on December 21, 2010, and related documents (“Financing Documents”), the existing loans were restructured and was treated as a single facility. Another  report in The Times of India said that Mallya may have already received $40 million of the $75 million severance package. With inputs from PTI