The Royal Challenge of bringing Vijay Mallya back: Why did CBI loosen its grip on the billionaire and let him leave?

In the whole of Vijay Mallya saga so far, there is one question that holds the key for the liquor baron’s timely escape to the UK, a week before 17 Indian banks moved the Supreme Court seeking his detention, citing the Rs 9,000 crore he owes to them, and the first right over the Rs 500 crore severance pay from Diageo.

Why did the Central Bureau of investigation (CBI) alter the nature of the look-out notice it issued to immigration authorities on Mallya within a month, enabling him to plan his escape from the country without hassles?

In the first place, the CBI wanted Mallya to be in the country, which is why it issued the look-out notice. If the agency believed that the Kingfisher case is critical enough to detain Mallya within the country, what changed its stance within a month, prompting it to relax the restriction? Was the agency asked to do it? Also, one can’t rule out the possibility that Mallya was tipped off about the banks’ move in the Supreme Court.

Vijay Mallya. AFP

Vijay Mallya. AFP

Consider this sequence of events:

On 16 October 2015, the CBI first issued a look-out notice on Mallya asking the Bureau of Immigration (BoI) to detain Mallya at the airport if he tries to leave out of the country. This notice made it impossible for the flamboyant ‘King of Good Times’ to leave the country.

But in November, just a month later, another look-out notice came from the same agency, this time, asking the BoI only to inform it about Mallya’s departure and his travel plans and not detain him.

On 25 February, Vijay Mallya resigns from the USL board as its chairman securing a fat $75 million (Rs 500 crore) severance pay from Diageo as part of a non-compete agreement. Mallya, in a statement, leaves a hint that he would want to move to UK ‘to be closer to his family’ and is still in dialogues with banks for a One Time Settlement.

On 26 February: SBI, the lead bank in the consortium, approaches the Bangalore DRT seeking the arrest of Mallya, first right on his $75 million pay and impounding his passport, but the DRT postpones the case.

On 26 February: In a text message to Firstpost, SBI chairman, Arundhati Bhattacharya said the bank is taking further action in the context of Mallya hinting to leave the country. “We are taking action as per law to protect our interests,” said Bhattacharya.

On 1 March: Mallya attends the Rajya Sabha in his capacity as a Member of Parliament.

On 2 March: Mallya leaves India with seven bags and with an unidentified woman in a Jet Airways flight.

On 7 March: The Bengaluru DRT finally issues an interim order only putting a temporary ban on Mallya from drawing the severance pay. Earlier in the day, the Enforcement Directorate registered a money laundering case against him and others in connection with the alleged default of loans worth Rs 900 crore from IDBI Bank. Why did the ED take much time to register this case, which has been there for while?

On 8 March: The SBI-led consortium files a Special Leave Petition in Supreme Court seeking the intervention of the court to prevent Mallya from leaving the country. But, it was almost a week by then since Mallya left the country.

Assuming that banks were not aware of Mallya’s exit on 2 March, one thing becomes clear. Mallya’s move of leaving the country (if indeed he has moved out with an intention to move out of the law) wasn’t decided in a day. It was planned in advance. Mallya knew what was coming and the idea was made possible only because the CBI changed the nature of its look-out notice. One should also note the fact that he had already received part of his severance pay ($40 million) by this time.

The issue is much more serious if someone indeed passed the information to Mallya about banks’ impending move, alerting him to plan his next step. It is logical that state-run banks would have surely kept the concerned government ministries in the loop before they planned such a big hunt on Mallya that reached till the Supreme Court. Also, when a prominent businessman is facing legal proceedings across various courts on his dealing with banks and alleged financial frauds, irregularities in using the bank money, it is surprising that the CBI let Mallya leave the country.

The fact is everyone knew the gravity of the Vijay Mallya case. The Rs 9,000 crore (including the accumulated interest amount) turned a non-performing asset (NPA) in early 2012 and, Mallya was tagged as a willful defaulter by three banks (though one bank reversed the decision after Mallya moved the Calcutta High Court).

Two questions arising here: One, who tipped off Mallya, enabling him to time his exit from the country just to escape the legal proceedings and just before the banks moved the court seeking his detention. Two, what exactly prompted the CBI to alter the nature of its look-out notice at a time when the Kingfisher case is becoming more and more serious? Was it under pressure to do so?

The answers to these questions will reveal the real story behind Mallya’s great escape.

Updated Date: Mar 11, 2016 15:44 PM

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