The Vijay Mallya episode proves once again that our system takes a soft approach towards the cronies.
A look at the sequence of events over the last few days shows that Mallya was not even playing a catch-me-if-you-can game with the government, banks, investigative authorities and the judiciary. It is just that the system has enough pores for people like Mallya to escape.
Here's how it all unfolded:
1) On 26 February, Vijay Mallya announces his sweethheart deal with Diageo. The agreement is that he will be paid Rs 515 crore ($75 million) as the severance package. He also resigned as chairman and director of United Spirits, agreed not to compete with Diageo in spirits business the world over for the next five years and not to interfere in its Indian arm's business matters. Mallya was to get an initial payment of $40 million. The balance was to be paid over five years, said a ToI report. In a statement, he also said he wants to move to London to spend time with his kids.
2) On 27 February, fearing Mallya may move out of the country without repaying the Rs 2,000 odd crores he had taken from it, SBI rushes to the Debt Recovery Tribunal in Bangalore. The bank wanted to advance the hearing on its original application filed in June 2013 (nearly three years back) for recovery of the loans it and 16 other state-run and private banks advanced to Kingfisher Airlines during 2004-12. However, an IANS report says SBI, when it approached the DRT, was not aware of Diageo's part payment to Mallya. "We were not aware that Diageo had paid Mallya $40 million and even Mallya's counsel (Uday Holla) did not tell the tribunal during arguments on March 4 about the payment. We will seek action against him (Mallya) for suppressing the fact," SBI counsel told IANS.
3) On 1 March, Mallya attends Rajya Sabha.
4) On 2 March, the SBI files four interlocutory applications in the tribunal after CBI director Anil Sinha expressed concern over its delay in acting against Mallya. The bank sought to impound Mallya's passport, get him arrested, secure the lenders' first right on the payout from Diageo and getting full disclosure of his assets in the country and abroad.
4) On 2 March, Mallya flies out of India, as has been revelealed by attorney general Mukul Rohatgi in The Supreme Court on Wednesday. This he manages despite the look-out notice issued by the CBI. Look-out notices are issued to alert immigration authorities to prevent any move of a person facing probe from leaving the country. "We cannot arm twist a bank in terming a loan default as fraud. We can only advice them which we have done. It is up to banks now to give us complaints based on which we can act," a senior CBI official has been quoted as saying in a PTI report. The report also notes that Mallya managed to escape though he notice was issued to all exit points from the country aimed at preventing the Rajya Sabha MP from moving out. Interestingly, much of the action in the drama has happened after he left the country.
5) On 6 March, Mallya issued a statement accusing media of sensationalism. He also said he was neither an absconder nor a defaulter. "I have been most pained as being painted as an absconder – I have neither the intention nor any reason to abscond. I have been a non resident for almost 28 years and the Reserve Bank of India has acknowledged this in writing. Over the years, I have built successful businesses in India and abroad. I am also honoured to be a member of the Rajya Sabha," he said. It now turns out that the statment was issued after he left the country.
6) On 7 March, the DRT ruled that Diageo should not give $75 million to Mallya until its next hearing which was posted on 28 March, a good 21 days later, giving probably enough time for the tycoon to think about his next move and act. But it now turns out that the order never reached Diageo. "We understand that the Debt Recovery Tribunal is in the process of issuing an interim order, which we will review once the full details are available," the Diageo spokesperson has told IANS.
7) On 7 March, Enforcement Directorate also registers money laundering case against Mallya. "Mallya and others will soon be questioned. The agency has collected relevant documents from concerned authorities and the bank in question," ED sources told PTI. The agency may have to put the questioning on hold now, as he has already left the country.
8) On 8 March, probably after banks found that the DRT order was not going to help them, they approached the Supreme Court to block Mallya from leaving the country. The court listed the case to be heard on 9 March.
9) On 8 March, corporate affairs minister Arun Jaitley said in written reply to a Rajya Sabha question that a Serious Frauds Investigation Office investigation into alleged fund diversion by Kingfisher Arilines is underway.
10) On 9 March, AG informs the court that Mallya had left the country already on 2 March. The court issues notice to Mallya to be present with passport in the court on 30 March, the date it will hear the case next.
11) On 9 March, the Maharashtra sales tax department also woke up and filed a plea in the Bombay High Court seeking recovery of dues worth nearly Rs 60 crore from Kingfisher.
12) On 9 March, a Delhi court fixed 24 April for hearing the final arguments in a case against Mallya for allegedly evading summons issued by the Enforcement Directorate in connection with alleged violation of foreign exchange rules.
Clearly, there are gaping holes in the system which need to be filled in at the earliest. It may be coincidental that the developments happen at a time when the Parliament session is on. But it should prompt the politicians, who are now engaged in a blame game over Mallya, should take note and act fast.
With inputs from PTI and IANS
Published Date: Mar 10, 2016 02:44 pm | Updated Date: Mar 10, 2016 03:07 pm