Mallya’s great escape: Did late, inadequate investigations help liquor-baron flee the country?

In the “city of Djinn” as Delhi is described by noted historian William Dalrymple, the city’s politics gets rather eerie with furious circulation of rumours. One such unconfirmed report spoke eloquently about Vijay Mallya’s overweening clout on the finance ministry in 2008.

Mallya, who was the centre of attraction in the upper house for high-profile and jet-flying life style, was conscious of the fact that his airlines, Kingfisher, was going under weather. And Mallya threw his weight around with a top functionary of the finance ministry and beseeched him to bail out with restructuring of the loan. Instantly, banks were instructed to give succor.

Vijay Mallya - Reuters

Vijay Mallya - Reuters

The Central Bureau of Investigation (CBI) which has been investigating the Mallya case has been flooded with several such rumours which they find it difficult to confirm. Yet on records, the investigative agencies have found gross violation of the rules and established practices in giving loans to Mallya at a time when his earlier loan was clearly in the category of a stressed asset and the airline wasn’t doing well. In fact, in the eight years of its operations, Kingfisher never posted profit even once.

What mystified the investigating officer is the fact that none of the banks came forward to lodge a report against Mallya even a year after the NDA government came to power. The CBI took up this issue suo moto and asked IDBI Bank, one among the lenders in the Kingfisher bank consortium, that why banks did so despite Mallya’s status of being a loan defaulter. What alarmed the CBI is the resistance it faced from the IDBI at the initial stage. Similarly no other banks came forward till the CBI started informing them about conducting a criminal investigation into the conduct of Mallya.

According to the officials investigating the case, during the recent interrogation of Mallya, the industrialist who appeared with his chief financial officer (CFO), answered most of the queries put forth by the sleuths. Most of the queries pertained the round-tripping of the loan amount given to the Kingfisher as bailout package. “There are evidences for diversion of the amount to the United Breweries” official said, adding that there is a possibility of money being siphoned off to foreign land to create assets there can not be ruled out.

However sustained interrogation of Mallya and bankers have so far revealed that the industrialist failed on repayment of his dues on account of failure of his business, which does not come under the category of “crime”. On the issue of diversion of fund to foreign countries to create assets , there is apparently still lack of credible information, which can conclusively prove Mallya’s criminal intent in taking the loan. With the enforcement directorate filing a case against him, there is a possibility that the investigating agency might nail him down finally whenever he comes to India.

Till now, the investigating agencies are in an untenable position to prove Mallya’s culpable conduct. On March 2, when he scooted off to foreign land, Mallya was quite aware of inadequacies of the investigation conducted against him.

Updated Date: Mar 11, 2016 08:17 AM

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