Liquor Baron Vijay Mallya Gets Arrested In London

NEW DELHI—British police have arrested Indian business tycoon Vijay Mallya in London on behalf of authorities in India, where he is wanted on charges of money laundering and bank demands that he pay back more than a billion dollars in loans extended to his now-defunct airline.

Mallya was arrested after showing up in a police station early Tuesday, said a statement from the Metropolitan Police in London. At a preliminary hearing, Mallya was granted conditional bail and released with the case adjourned until May 17.

In New Delhi, the government hailed Mallya’s arrest, saying it would not spare anyone who indulged in fraud.

“Mallya will be brought back to India. The government is working toward it. No one will be spared,” said Santosh Gangwar, the junior minister for finance.

India’s Enforcement Directorate, now investigating the liquor baron’s debts totalling 94 billion rupees ($1.45 billion), asked a New Delhi court last year to demand Mallya’s presence during proceedings.

At the time, it said Mallya was not co-operating with investigators, and three times ignored their summons to give evidence.

Mallya was famous for his flashy lifestyle and lavish parties attended by fashion models and Bollywood stars. He was once hailed as India’s version of British tycoon Richard Branson for his investments in a brewing and liquor company, an airline, a Formula One team and an Indian Premier League cricket club.

But he ran into trouble when he failed to repay millions of dollars in loans and left India last year amid attempts by a group of banks to recover the money.

The failure of Kingfisher Airlines, which he launched in 2005, began his slippery slide into debt and triggered the collapse of several of his businesses. The Indian government in 2012 suspended the airline’s license after it failed to pay pilots and engineers for months.

He had been living in the United Kingdom since March 2016 and had refused to return to India to face trial.

India cancelled his passport and began an extradition process asking the U.K. government to deport him to India.

India’s Central Bureau of Investigation, the country’s equivalent of the FBI, had charged the beleaguered tycoon with cheating and conspiracy for defaulting on a 9 billion rupee loan, given in 2009. The loan was intended to buy aircraft parts, but Mallya was accused of having transferred it abroad.

1 reply
  1. Joe Levin
    Joe Levin says:

    LONDON — Vijay Mallya, the liquor baron wanted in India for defaulting on over Rs. 8,000 crore in bank loans, was arrested April 18 in London, only to have a court grant him bail within hours of his arrest. India has filed a request to have Mallya extradited.

    Metropolitan Police said Mallya, 61, was taken into custody after attending a central London police station.

    “Officers from the Metropolitan Police’s Extradition Unit have this morning, Tuesday April 18, arrested a man on an extraction warrant. Vijay Mallya, 61, was arrested on behalf of the Indian authorities in relation to accusations of fraud. He was arrested after attending a central London police station, and will appear at Westminster Magistrates’ Court later today,” the London Metropolitan Police said in a press statement.

    The Westminster Magistrates’ Court later granted him a £650,000 bail bond. The next hearing in the case will be May 17.

    Before granting bail, the court issued strict orders for Mallya, ruling that “neither he can apply for travel documents nor attempt to leave the U.K.”

    It further ordered the tycoon to live in Hertfordshire and keep his cell phone on 24 hours a day. Mallya’s revoked passport will also be retained.

    Mallya’s extradition was hot on the agenda when British Prime Minister Theresa May visited India in November 2016. As former Home Secretary, May is aware of the case, and her stand on fraud and money laundering is likely to make it difficult for Mallya to stay in London without facing charges.

    Mallya is among several Indian citizens wanted for alleged offenses in India, but so far there has been only one extradition since India and the U.K. signed a treaty in September 1992. Samirbhai Vinubhai Patel was extradited in October 2016 in a case related to the 2002 Gujarat riots.

    According to the British extradition procedure, India’s request was certified by British Home Secretary Amber Rudd Feb. 21, and sent to the Westminster Magistrate’s court to issue an arrest warrant, which was executed April 18.

    Home Secretary Rudd has taken several steps to end financial crime in London and is taking a tough stance on cases related to financial crimes.

    The news of Mallya’s arrest and his appearance in court was London’s second most tweeted, following the snap election Prime Minister May called for June 8.

    After receiving bail, Mallya tweeted: “Usual Indian media hype. Extradition hearing in court started today as expected.”

    But Indian officials, on condition of anonymity, told this correspondent that “the process will now intensify” to extradite the liquor baron. “There are coordinated activities of several Indian departments with their British counterparts to make Mallya face charges back in India,” an official said.

    Mallya fled to Britain in March 2016 after being pursued in court by Indian banks seeking to recover Rs. 8,191 crore owed by his now defunct Kingfisher Airline.

    The banks were able to recover only Rs. 155 crore. Despite multiple injunctions, Mallya failed to appear before investigators and eventually flew out of India.

    In February, the Indian government delivered a formal request to British authorities for Mallya’s extradition, saying it had a legitimate case against him on charges of financial irregularities and loan default.

    The loan, granted in September 2004, was reviewed in February 2008.

    India’s Central Bureau of Investigation and Enforcement Directorate initiated criminal investigations against Mallya in July 2015 and January 2016 respectively, under the Prevention of Money Laundering Act.

    The Indian agencies launched the investigations based on a complaint filed by a consortium of 17 banks, led by the State Bank of India.

    The cases were registered against Mallya, Kingfisher Airline, UB Group company, United Breweries Holdings, Ltd. and others.

    The ED in March and April 2016 issued repeated summons to Mallya to appear before the agency, but he failed to do so.

    Subsequently, in April 2016 a Mumbai court issued a non-bailable warrant for Mallya’s arrest and his passport was revoked on April 23.

    In November, the court ordered the seizure of Mallya’s domestic assets and the entities he controlled.

    The ED said that it has attached properties of Mallya and his companies with a total market value of more than Rs. 8,000 crore.

    Press Trust of India further reports Prime Minister Narendra Modi April 18 said those who have “looted the poor and the middle classes will have to return what they have looted.”

    Modi was responding to a tweet by a follower who wrote that “…corruption not only robs us of hard earned money but also of our dignity.”

    “Indeed. There is no place for corruption in India. Those who looted the poor & middle classes will have to return what they have looted,” Modi further tweeted.

    The exchange came the same day Mallya was arrested.

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