If Vijay Mallya doesn’t fall in line within a week’s time and explain his intent to return home and pay up banks, he will officially become a an outlaw staying in a foreign country without valid legal documents (Mallya is believed to be in UK now). On Friday, the Indian government suspended his diplomatic passport for a month. Mallya has one week to respond why his passport shouldn’t be impounded or revoked.
In other words, the next one week would decide two things. First, the fate of Vijay Mallya as a businessman, not just in India but anywhere in the world. Second, whether Indian banks and tax authorities will get their dues or not. Mallya’s defunct airline, Kingfisher, owes Rs 9,000 crore to a host of Indian banks.
The liquor baron is being investigated by Indian agencies for alleged financial irregularities in various transactions. Mallya left the country on 2 March shortly before banks moved the Supreme Court seeking his detention in the country.
This move has, in fact, complicated the Kingfisher-Vijay Mallya saga for both sides. If Mallya fails to comply and get tagged as an absconder by Indian government, that is the end of his career as an industrialist. No reputed individual or corporate would cozy up with him to do business in any country. That will be the end of Mallya as a businessman, who grew his empire to a multi-billion business taking over from his father Vittal Mallya. There are two possible options open before Mallya now.
One, forget India and seek asylum in a foreign a country. Mallya has assets and businesses across the world, which he can still control indirectly and thumb his nose at the Indian government and 17-banks. Even in UK, where human rights laws are way stronger than India, it wouldn’t be difficult for Mallya to prove that his return is not safe to his home country and there is no fair ground for revoking his passport by Indian government. Mallya has the money power to employ the best legal talent in the world to make his case.
Two, recognise the grave trouble he is in and respond to the Indian government within a week apologising for the delay in returning and face the law of his home land. He could continue negotiations with the bank consortium headed by State Bank of India and offer them a convincing roadmap to pay up the money he owes them. The last offer to pay up Rs 4,000 crore to banks wasn’t a convincing offer for banks since the offer revolved around too many ‘ifs’ and ‘buts’.
If one goes by how Mallya has conducted himself so far in the loan default case, it is very unlikely that the Kingfisher chief would ever turn up to the country and clear his name. If he ever wanted to do so, he wouldn’t have left the country in first place and would not have worsened the case to such an extent. The man, who once was the poster boy of Indian aviation and ran a multi-billion business empire, had much more than money at stake--his name as a flamboyant businessman and that of a parliamentarian.
Mallya could have paid up the money he owes to banks in parts. Remember, Kingfisher’s Rs 7,000 crore loans turned a non-performing asset (NPA) to banks in 2012 and was tagged as wilful defaulter last last year, not in last month or so. Hence, clearly, Mallya never had the intent to pay back, even when the whole mess finally resulted in his ouster from UB group—the empire he and his father built up over decades.
Legal experts point out several cases in the past where Indian government has failed to bring back absconders and criminals (Iqbal Mirchi, Nadeem Saifi and Abu Salem). For someone like Mallya, it wouldn’t be difficult to seek asylum using his money power. “It is too late for government to rise and wake up,” said lawyer Majeed Memon to CNBC TV 18. “It is not that easy (in UK), where human right laws are strong. It is a long, time consuming and money consuming exercise that might end up in futility,” Memon said.
If Mallya turns another Lalit Modi, the onus lies with those who let Mallya flee the country, when investigations were on his financial dealings and loan default. In this backdrop, several questions arise here. Was Mallya tipped off about what is in store? Why tax, enforcement authorities and banks delayed action for too long before they finally woke up to realize the problem? What is preventing the taxmen and banks to initiate process to sell off Mallya’s much valuable assets and recover the money.
The final picture will emerge only in another week when Mallya has been give a deadline to respond to Indian government on passport suspension. If Mallya is opting to remain silent and defiant, the story will be not too different from that of Lalit Modi and others who still remain out of the reach of Indian law. This will be highlighted as another instance that shows the inefficiency of the state to act in time against the guilty.
Published Date: Apr 16, 2016 08:05 AM | Updated Date: Apr 16, 2016 08:15 AM