Will Vijay Mallya ever return to face charges in India? The political response to this question, especially from the ruling dispensation, is that “it is a matter of when and not if”. Ask the CBI and many of the agency’s officers will give you the same answer. Sceptics and those close to the absconding businessman hope that he may beat the charges and come out unscathed from what has turned into one of the biggest political issues of recent times.
The Vijay Mallya extradition hearings in the Westminster Magistrates’ Court in London await judgment on December 10—a year since the United Kingdom’s Crown Prosecution Service began arguments on behalf of the Indian government to deport the fugitive businessman, wanted for questioning by Indian agencies on charges of money-laundering, bank fraud and embezzlement and has around 27 cases pending in various courts. The flamboyant businessman is often portrayed as a symbol of bad business practices. TV debates and public opinion are stacked against him; his greatest sin of all was to run away to the UK, from where he sent his resignation as a Rajya Sabha member.
Those following the trial in the UK closely feel that the verdict will be in favour of the Indian government, perhaps with a few conditions. A person who has kept tabs on the hearings and has knowledge of UK’s laws and processes, says that the execution of a deportation order is not likely before next September, which is a year from now and after the 2019 Lok Sabha elections. The person said that based on the outcome and the harshness of the verdict, the government may offer a deal to Mallya once the ‘if-then-else’ quandary has passed. As for now, both sides await the verdict.
A favourable court verdict may be enough for the Bharatiya Janata Party (BJP) to showcase it as a successful effort of the Narendra Modi government while seeking re-election next year. A confidante of Mallya says the businessman feels that the government is not really interested in recovering its dues but in making an example of him and using the deportation case to gain political mileage.
Mallya’s now-defunct Kingfisher Airlines defaulted on loans of around Rs 6,000 crore from a consortium of banks led by the State Bank of India. In 2009-10, sporadic repayment of loans, and other operational debts, led to the consortium restructuring his loan on rigid terms. Outlook has learnt that Kingfisher Airlines allegedly skimmed cash—some of which was later recovered—from multiple revenue sources while the outstanding loans and employees’ salaries remained unpaid. After the SBI’s committee of auditors declared his loans as NPAs in 2011-12, Mallya allegedly siphoned off cash from the company accounts. This was despite a restructuring term that specifically restricted Mallya from claiming commission for guaranteeing repayment of the fresh loans from the banks. Kingfisher Airlines also owes tax deductions made from employees’ salaries and service tax dues.
The CBI filed a chargesheet last year which indicted Mallya and officials of Kingfisher and the IDBI bank in a case related to a Rs 900-crore loan from the Bank. The central probe agency is expected to file another chargesheet by the end of the year. Financial crime probe agency Enforcement Directorate has also investigated the transactions and accused the businessman of laundering money.
The hearing in the UK has been a challenging test for the CBI, which has had to establish that there are sufficient prima facie charges to warrant his deportation to India. Mallya’s defence, led by one of UK’s top specialists in this area, has been no less dynamic. They made several allegations to cover their point that the political atmosphere was not conducive to a fair trial. They also mentioned the controversy around R.K. Asthana’s appointment as special director of the CBI, while the investigator sat stonily in court. Asthana has doggedly pursued the case and was present for all the material hearings of the case. This is the first time that government departments and key agencies have worked in tandem to secure an extradition from a foreign country.
In the event of a deportation order and deal, there are indications that Mallya wants an assurance that he should not be humiliated upon arrival. In other cases, the CBI has offered bail on arrival during deportation proceedings. Mallya would have to face trial and appear personally in court for each hearing. Needless to say, he will not be allowed to leave the country. A Delhi-based lobbyist, who is a regular guest of Mallya in the UK, is rumoured to have built some bridges for the fugitive businessman, who has entertained a few Indian politicians in his homes in the U.K.
To his friends, Mallya has maintained that he has tried to settle the matter through an earlier offer made during proceedings in the Karnataka High Court. Mallya has said he had offered Rs 6,000 crore, which he believes is higher than the 80 percent that defaulting debtors pay to settle similar debts. “Mallya said that his words were twisted. He says he hadn’t claimed to have met with finance minister Arun Jaitley with an offer but, during their brief encounter in Parliament, told the FM that he was on his way to Geneva and then London. The statement on settlement was conflated with a mention of this exchange,” claims a confidante of Mallya in Delhi. But the damage has already been done and Mallya’s purported settlement offer to Jaitley has stirred a controversy that will not die down any time soon in an election year, though the finance minister has denied it flatly as well.
A UK-based Indian businessman says Mallya is now trying to escape criminal charges by trying to settle the debts. “He is trying to lay grounds for an appeal and an application for political asylum to the UK government in the event of a deportation order. That will make it difficult for an actual deportation before eight months, which means it will not materialise before the 2019 Lok Sabha elections,” the businessman says.
The day after reports on Mallya’s purported statement about the offer to Jaitley, other reports emerged describing how the CBI allegedly diluted its ‘lookout notice’ for Mallya. Congress president Rahul Gandhi accused CBI joint director A.K. Sharma of diluting the notice in November 2015, allowing Mallya to enter and exit the country several times before he finally left in March 2016. A CBI source clarified that the agency did not have enough material to arrest him at the time so it decided not to detain him at the airport.
Mallya Case: Possible Scenarios
- London court deportation case verdict date: December 10
- If verdict favours India, the UK Home Office has eight weeks to approve Mallya’s deportation
- Whoever loses the case can file appeal in UK High Court, which takes a minimum of eight months to rule on such appeals
- The high court verdict can be challenged in the UK Supreme Court only if the high court judge, who gave the ruling, permits
- If Mallya loses, the Indian government, in order to avoid further delay, might offer him a deal to return to his home country