Vijay Mallya case: CBI under fire; says it erred on look-out circular

New Delhi: Under fire over the flip-flop on Vijay Mallya's look-out circular (LOC), a red-faced CBI on Friday admitted that the notice seeking detention of the beleaguered businessman was issued to Bureau of Immigration because of an "inadvertent error" on its part.

The CBI is facing flak after questions were raised how the liquor baron was able to go abroad unhindered on 2 March that has triggered a political slugfest with the BJP and the Congress trading charges.

It had changed the nature of look-out notice against Mallya within one month of issuance from seeking his detention while leaving the country to that of merely providing information about his travel plans.

A CBI spokesperson on Friday claimed Mallya was not found during searches on 10 October, 2015 after which the agency wrote to BoI, saying it needs to be issued to ensure "his availability for questioning" in connection with Rs 900 crore loan default case involving IDBI bank.

She said that along with the covering letter, proforma for the circular was attached in which the column related to seeking the detention of an accused was wrongly "ticked" by a SP-level officer.

Vijay Mallya case: CBI under fire; says it erred on look-out circular

Vijay Mallya. Reuters

The agency claimed detention under the look-out circular was only possible on the strength of a non-bailable warrant against an accused which was not the case with Mallya.

It said on 23 November, CBI's Mumbai office was informed by BoI about the "imminent arrival" of Mallya over phone.

It wanted to know what needs to be done to which the agency realised "corrective" measures were needed and told it not to detain him and asked to provide only his whereabouts and movements, the agency claimed.

A day after the look out circular was changed from seeking "detention" to "only providing information about his movements", Mallya arrived in India and appeared for questioning before CBI on 9, 10 and 11 December, it said.

After opening of look-out circular, Mallya travelled abroad at least three times before his departure on 2 March.

According to CBI manual, "Request for Lookout Notices should be sent only after obtaining approval of the Joint Director concerned. The necessity for continuing the Lookout Notice should be reviewed every six months."

CBI had registered a case against Mallya, Kingfisher Airlines, Chief Financial Officer of the airlines A Raghunathan, and unknown officials of IDBI Bank in its FIR alleging that Rs 900 crore IDBI loan was sanctioned in violation of norms regarding credit limits on the basis of complaint received from the bank.

As questions centred around Mallya's departure, the man himself took to Twitter to explain that he did not flee from India and is not an absconder.

He said in his posts that he would comply with domestic laws.

India's financial crime-fighting agency, the Enforcement Directorate, has summoned Mallya for questioning on March 18, a senior agency official said later on Friday. A spokesman for Mallya's holding company, UB Group, declined to comment on the summons.

The self-styled "King of Good Times", who built his business around Kingfisher beer and co-owns a Formula 1 racing team, explained to his five million Twitter followers that he travels to and from India frequently, saying he was the target of "a raging fire" media witch hunt.

Mallya, also a member of parliament's upper house who was last seen in the chamber on 1 March, didn't disclose his current location in the social media posts. Two people familiar with his travel arrangements told Reuters Mallya flew first class to London on Jet Airways Flight 9W-122 the next day.

Indian TV reporters said they had traced Mallya to the Hertfordshire village of Tewin, north of London, where he is known to locals. The businessman's luxury home, called Ladywalk, cost 11.5 million pounds ($16.4 million) when bought in July 2015, property records show.

Commentators say the high-profile case is symptomatic of weak management at India's public sector banks - Mallya's lead creditor is State Bank of India. While a bill to modernise India's bankruptcy laws is now before parliament, the outdated legislation that is currently in force leads debt litigation to drag on for years.

Finance Minister Arun Jaitley told parliament on Thursday that the government had instructed banks to go "all out" in their efforts to recover the money owed by Kingfisher, pointing to cases of "wilful default bordering on fraud".

Banks ramped up their campaign to retrieve funds after Mallya quit as chairman of spirits maker United Spirits, a unit of Diageo Plc, last month. As part of that settlement, Diageo will pay Mallya $75 million over five years.

With inputs from agencies

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Updated Date: Mar 12, 2016 10:19:37 IST

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