Vijay Mallya beat his own record of securing bail after the high-profile arrest, on Tuesday, by securing bail in less than 30 minutes. Last time when he got arrested in April, it had taken some three hours for Mallya’s lawyers to do the job.
Shortly after the arrest on Tuesday, legal experts had a word of caution that it doesn’t necessary mean Mallya’s extradition to India will happen immediately. The bullet speed bail proved that Mallya’s arrest was more of procedural and it will take a long time for India before Mallya is brought back to the country to face the law of the land in the Rs 9,000-crore Kingfisher bank loan default and alleged fund diversion case.
Nevertheless, the important point is that India’s case against Mallya is now even stronger. The writing on the wall is clear for the ‘King of Good times’, whose grounded airline, Kingfisher, proved to be a nightmare to a clutch of banks. The second arrest was made after the Enforcement Directorate made a fresh affidavit with more evidence to the UK courts about the charges of fund diversion and financial irregularities allegedly conducted by Mallya. The UK court has found merit in those arguments and hence the arrest. In that sense, this is a major boost to the Narendra Modi government for which bringing Mallya back to home has become a big political issue as well.
Remember, Modi government has been pushing for Mallya’s arrest and extradition for long, asking various investigative agencies to plug the loopholes as the government seeks Mallya’s extradition from the UK. But, it is now clear that the road is long for the Indian authorities before Mallya is finally brought back to the country's soil. UK laws are tough to deal with in extradition cases. There are several instances from the past. The next hearing scheduled in December will give more definitive evidence about the course of the case and Mallya’s fate. So, the right way to describe Mallya’s second arrest today is that it is just another step towards the target but with no certainty about the final outcome of the case.
In April, Mallya’s arrest was made on the basis of a request by the Central Bureau of Investigation (CBI) but this time, according to reports, the supplementary evidence submitted against Mallya has played a critical role in his arrest. In September, the CBI and the Enforcement Directorate have found evidence of Mallya laundering a major chunk of the Rs 6,000 crore bank loans taken for Kingfisher Airlines. This fresh evidence, when submitted, will add more strength to the present case before the UK court, in addition to the existing charges.
The Kingfisher case
There are multiple dimensions to the Kingfisher-Vijay Mallya case beyond being a normal corporate-bank loan default case. The tug of war between Mallya and banks began in 2012 when Kingfisher was grounded and banks began declaring Kingfisher as an NPA (non-performing asset). But, the reasons that led to an impasse between Kingfisher and some 17 banks actually started long back when banks generously assisted Kingfisher both in the form of fund and non-fund support despite no signs of financial improvement of the carrier.
When Mallya approached the group of lenders for further lending in 2010, there was serious differences of opinion among the group of senior bankers in SBI, and other banks in the consortium, on why should they lend to the struggling airline, which has never made any profit in its eight-year-long life, yet again. But, the majority lenders’ decision was to take a big risk again and lend to Mallya relying on his personal guarantee.
The Mallya-banks fight intensified dramatically after the liquor king flew away from India in March last year saying he wanted to spend more time with his family. Since then, Mallya has taken a defiant approach against the charges raised by the Indian banks and the way Indian media covered this case alleging that he is being treated in an unjust manner. For the Modi government, the case soon escalated beyond a typical corporate loan default case to a big political issue.
To be sure, there are a number of bank loan default cases which are far more serious than the Kingfisher case in terms of the loan amount. But, Mallya soon became the poster boy of India’s bank loan defaulters, putting immense pressure on the Modi government to take action against him. A victory or otherwise against the battle on Mallya will send a strong signal to India’s bank loan defaulters.
Published Date: Oct 03, 2017 20:15 PM | Updated Date: Oct 03, 2017 20:17 PM