Embattled liquor baron, Vijay Mallya, resigned from his capacity as a Member of Parliament on Monday, a week after the Rajya Sabha ethics panel recommended his termination. The committee had given Mallya a week to respond. Mallya’s MP status was supposed to expire in June 2016. The former Kingfisher chief, facing charges of Rs 9,000 crore loan default to a clutch of 17-banks and financial irregularities, moved to the UK on 2 March. The panel recommended Mallya’s exclusion from Parliament after taking into account all these charges, including his wilful defaulter status.
Mallya, in his resignation letter, said he was disappointed with his Rajya Sabha colleagues and repeated the argument that government’s action of revoking his passport was unreasonable, TV channels reported. In April, the government had revoked Mallya's passport on the request of the Enforcement Directorate (ED) after the agency found evidence of fund diversion by Mallya with respect to the Rs 900 crore IDBI Bank loan default case. Mallya is also facing non-bailable arrest warrants (NBW) against him on charges related to cheque bouncing.
Banks are chasing Mallya since he had furnished personal guarantees against the loan facilities extended to his now-defunct airline, Kingfisher, grounded in 2012. The loan became a Non-Performing Asset (NPA) in 2012. Two lenders—SBI and PNB—had tagged Mallya as wilful defaulter. Mallya has been arguing that banks have no right to seek his foreign asset details, but the Supreme Court, late last month, passed the details of his assets to the banks. Earlier, the liquor-baron had blamed the ‘haste’ of Indian government in revoking his passport, thus creating impediments in the ‘whole process and endeavor.
Though Mallya had offered to pay Rs 4,000 crore to banks, the lenders rejected the offer citing lack of clarity in the offer.
Mallya has been an MP twice--first in 2002 and in 2010. Going by the data (on his second term that started in mid-2010 and ending mid-2016) on the website of PRS Legislative shows that Mallya has an attendance of 30 percent. The number of debates he participated is nil.
The Rs 9000 core loan to Kingfisher turned bad back in 2012. Even though banks attempted two auctions to recover at least a fraction of the money by selling Kingfisher House, the airline’s Mumbai-based property and other assets, the auctions failed as they were no takers.
In a recent interview given to UK-based Financial Times, Mallya had warned that revoking his passport and arresting him wouldn’t help lenders get back money. “By taking my passport or arresting me, they are not getting any money,” Mallya told the paper in his first interview after leaving the country on March 2, with seven bags and an unidentified woman to UK and shortly after receiving a Rs 500 crore severance pay from Diageo, after stepping down as the chairman of United Spirits,” Mallya said in the interview.
For the Indian government, Mallya’s deportation from UK wouldn’t be an easy task given the strong human rights laws and the nature of the legal system of that country, where it is highly difficult for a foreign country to convince the local authorities on extradition requests. Mallya would fight the case with the backing of his legal team to prove his point that he is facing an unfair treatment from the Indian government.
Mallya has clearly said that he wouldn’t return to the country for now given the environment against him here. As far as the deportation plans go, it wouldn’t be easy for the Modi-government to win this herculean task, unless it puts it foot down and requests the UK-authorities keep their promise on bilateral cooperation in dealing with offenders. But, for that the government will need solid proof of financial irregularities by Mallya in the Kingfisher case. Charges of loan default can be easily contested by the millionaire in the UK courts as something caused by business failure, which is part true in the Kingfisher case.
Published Date: May 02, 2016 19:49 PM | Updated Date: May 02, 2016 19:49 PM