Vijay Mallya is smartly playing the victim card thanks to a weak case by CBI, ED
The ED’s hurried actions of chasing his assets back home for a significantly smaller amount (compared to the actual loan amount), has given Mallya more reasons to make his case that why it is even more difficult to pay back the money now selling his assets
There seems to be no thorough plan or coordination between two prominent investigating agencies--the Central Bureau of Investigation (CBI) and Enforcement Directorate(ED)--in the case against the absconding liquor-baron, Vijay Mallya, whose airline, Kingfisher, owes Rs 9,000 crore worth loans to 17 Indian banks. This lack of coordination, or rather confusion, is lessening the chances of loan recovery from Mallya—the ultimate aim of the whole witch-hunt--or even bring the industrialist face the Indian law for his alleged unlawful activities.
Mallya is probably a happy man with the lack of disconnect, confusion and haste exhibited by Indian sleuths in this case. He probably realises that there is no method in their madness. That gives him more firepower to make his case before a court of law anywhere in the world and play the victim wearing the garb of a failed entrepreneur. If one reads between the lines of his Sunday statement, shortly after the ED attached some of his domestic assets, this strategy becomes increasingly obvious.
Beyond the emotion and anger, Mallya raises several crucial points in the statement. These are;
1) The ED’s action of attaching his and one of his company’s assets in India in the Kingfisher case is legally not valid.
2) The ED action makes raising resources by selling his assets to repay banks even more difficult now.
3) The ED/CBI have already been given all documents including money trail through bank accounts in the Kingfisher loan to prove that the money has been used for legitimate purposes, hence no misappropriation of the funds is done and finally,
4) He never refused to appear before the ED (the premise of the agency’s request for NBW against him) but only sought time to sell his assets.
Here, Mallya is listing his logical arguments to sway the public opinion in his favour and portray that he is being hunted for no adequate reasons. The investigators’ inability to nail Mallya in this case on charges of serious financial fraud with rock solid evidence is proven when the UK denied the deportation request of Mallya and the Interpol’s hesitance to issue a red corner notice on him.
So far, the ED has only managed to persuade the Indian government to revoke Mallya’s passport using its influence and taking advantage of the public, political and media pressure on this high profile case, but doesn’t have a well-woven net yet to catch the big fish.
All this is happening when there is a case going on in the Supreme Court between Banks vs Mallya on the loan recovery and when the CBI maintains that it doesn’t have a strong case yet against Mallya. Even when the ED is moving on its own in the case, the CBI is initiating another round of investigation by setting up a special team.
Mallya is probably clearer in his head than the investigators about the course of the Kingfisher case. His strategy is to make his points through well-timed, point by point presentations and claims, to contest each and every hurried move by the ED that seems to operate under significant pressure.
The ED’s hurried actions of chasing his assets back home for a significantly smaller amount (compared to the actual loan amount), has given Mallya more reasons to make his case that why it is even more difficult to pay back the money now selling his assets, which is precisely what he did soon after the ED action. The reason why banks rejected Mallya’s offer to pay Rs 4,000 crore is that lenders do not want to settle for anything less than the whole amount.
The first excuse for Mallya for not returning to the country was given when his passport was revoked after he left for UK on 2 March. Mallya has duly used that opportunity as well. His strategy based on facts, coupled with emotional appeals of a failed businessman (in the Kingfisher case), would eventually sway the public opinion in his favour. The witch-hunting by ED, so far seen as a battle to save the public money, will be increasingly seen with suspicion of bias. Mallya has even questioned the CBI decision to set up a special team to investigate the Kingfisher case.
“After months of investigation which included personal interviews with me, the CBI is reported to have now constituted a Special Investigation Team (SIT) to further investigate Kingfisher Airlines and myself. It is, indeed, sad and disappointing that the thousands of documents submitted by us and interrogation of several executives seem insufficient to convince them there has been no wrongdoing,” Mallya said in the statement.
It’s not to say that Mallya would have had a change of mind and returned to the country to pay up banks if the ED didn’t initiate the actions. It is pretty clear that the liquor-baron wouldn’t give an easy win to the banks and investigators anyway—something he made abundantly clear in his interview with Financial Times saying “by arresting me or taking my passport, they aren’t getting any money”. But, cornering Mallya with convincing evidence (such as money trail to prove misuse of funds), would have left him no room to play the victim card before the public and the court of law. This is something Firstpost had noted earlier.
In a war, mere strength will not destroy the enemy, the battle of strategy is equally important. Mallya realises this more than his ‘enemies’. If getting back the Rs 9,000 crore from Mallya is the primary goal (and subsequently making him face the law on alleged wrongdoings), the investigators should be made aware about something called the time value of the money. In this case, the original loan amount drawn by Kingfisher was about Rs 6,900 crore but the loan outstanding today stands around Rs 9,000 crore on account of the interest accrued.
Since the case is now being dealt by the Supreme Court, it would have made far more sense for the ED to furnish evidences of financial crime by Mallya (if they have any) before the court and establish his wrongdoing before moving to revoke his passport and attach his domestic assets. It is doubtful whether they have done so, so far.
Remember, only two banks in the 17- lender consortium have so far tagged Mallya as a wilful defaulter. Also, the stance of a section of banks including IDBI Bank that there is evidence of fund diversion by Mallya weakens the case. In this backdrop, Mallya should have then given a final deadline to return and pay back before initiating the final assault. But, the lethal weapons were fired before assessing the weak points and position of the enemy. The target is intact so far.
Equally important is to identify the officials (bankers and bureaucrats) who might have helped Mallya flout the rules to get such a huge loan to an airline that has never made profit and against guarantees such as Kingfisher brand, trademarks. Did he receive political help to secure the loan in the first place, get a softer handling by banks for four long years, and finally escape the country just in time before all hell broke loose? There are several unanswered questions.
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