It is not likely that Vijay Mallya will get extradited back to India in the immediate future, and the whole process may take even up to two years provided investigators present enough evidence to convince the UK courts about the merits of the case, according to legal experts (read a Firstpost story here) ). Before the case comes up for next hearing on 17 May, Mallya and his battery of lawyers have enough time to prepare the ground for a strong legal battle, that will make the task tough for Indian authorities. The entire process may take a very long time.
But, here’s what the arrest by London Police will do to fugitive Mallya. It will considerably weaken the billionaire’s longstanding argument that he is being framed by banks and investigators for no fault of his in the Rs 9,000 crore loan default case. The very fact that UK authorities found merit in India’s argument of Mallya being an economic offender, enough to execute his arrest, snatches away the ‘victim card’ Mallya has used so far to insulate him from investigations in the Kingfisher case.
The bail, secured in just about three hours of arrest, is only a temporary victory for Mallya. He is no longer the business man who is personally targeted by banks and sleuths for ‘no fault of his’ but for ‘business failure’. He is an absconder and a suspect who was arrested on charges of engaging in serious financial irregularities in his home country. A bail, as legal experts pointed out, doesn’t free him from the charges or prove that he is not guilty. It’s just that the law will take its course to bring Mallya's case to a logical end.
Even though multiple Indian courts had issued summons and warrants against Mallya, till now, the tycoon was not obliged to answer to any UK authorities about the alleged wrongdoings in the Kingfisher loan case, but the arrest in the UK court makes him answerable to the charge to the government and legal system of that country. Mallya has, all along, blamed the Indian authorities and media of launching a witch hunt on him. In January, this year too, the businessman repeated this complaint on Twitter. “I am kind of getting used to these witch-hunts coming from all directions with no legal basis whatsoever. Shows what the government machinery can do," Mallya tweeted then. “Till this minute, there is no final judicial determination on what KFA owes to banks and what I may owe in my personal capacity after trial," Mallya tweeted.
With Mallya’s repeated statements that he is being hunted for what is essentially a business failure, the businessman had found some sympathizers in the industry and even among a section of bankers. But, all of these arguments cease to have much value with the UK arrest.
Of course, Vijay Mallya isn’t the only one who has taken the banking system, neck-deep in bad loans, for a ride. There are many others, some with even bigger liabilities. But, over time, Mallya has gained a poster boy image representing all large loan defaults by wily promoters, also thanks to the public exhibition of wealth and continuous defiance to banks and investigators. A final development in the Kingfisher case, will, surely set the precedent for other high profile loan default cases, where crony promoters have fooled the banking system by wilfully defaulting on loans.
For this reason, it is even more critical now for the Modi-government to not give up on the Mallya case. It should seek all legal channels to ensure India has enough evidence, a foolproof case, to defeat the billionaire fugitive's arguments in the UK courts.
The core of Mallya’s arguments against banks and investigators has been that he hasn’t borrowed the money personally, but his airline did, hence the default cannot be his personal responsibility. This is not true. Banks have time and again stated in courts that the Kingfisher loan was given to Mallya on his personal guarantee and assurance. In case of loan default, the guarantor must pay back the money. Mallya cannot escape from this responsibility.
Arguably, the Modi government failed to foresee the possibility of Mallya fleeing the country even when cases are pending against him in various courts but the way the government followed up the case post-Mallya’s exit shows its determination and persistent approach in the case, both diplomatically and legally. This is commendable.
But, one shouldn’t forget that getting back Mallya is only one step in the ultimate battle. The main task is to make the industrialist pay back the money he owes to the banks. Putting Mallya in jail alone wouldn’t help bankers get back their money. We have the Sahara case as an example where inspite of the promoter being jailed, the group is yet to pay back the investors in full. In the Kingfisher case, Rs 9,000 crore due to banks is public money ultimately and whether the money was lent to Kingfisher or Mallya, the money needs to be returned. With very little assets left with Kingfisher, banks can recover the money only from the guarantor. Beyond the charges of financial fraud, Mallya must answer when this money will be paid back in full to banks. Either way, the billionaire can’t play the victim card any longer
Published Date: Apr 19, 2017 11:41 am | Updated Date: Apr 19, 2017 11:41 am