ED files charge sheet against Vijay Mallya in Rs 900 crore IDBI loan case

Prosecution filing to be submitted to UK Court; ED to present additional evidence in July 6 hearing

In a Rs 900-crore money laundering case, Enforcement Directorate (ED) on Wednesday filed its first charge sheet against liquor baron Vijay Mallya, Kingfisher Airlines, two Kingfisher Airlines executives and five IDBI Bank officials.

The charge sheet will now be submitted before the Westminster Magistrates' Court, where the Indian government's case for Mallya's extradition is going on. The next hearing is on July 6.

The charge sheet was filed in ED's court on Wednesday under Section 45 of the Prevention of Money Laundering Act (PMLA).
 

The probe agency believes the charge sheet would make the case stronger. "We will also provide additional evidence against Mallya in the London court. This would strengthen our case for his extradition," said ED's lawyer Hiten Venegavkar.

The 5,500-page charge sheet against Mallya says how he allegedly diverted funds from the Rs 900-crore loan received from IDBI Bank for his personal expenses and the said diversion of funds to group entities in India and abroad.

The ED in the charge sheet also attached documents on money-trail analysis, which talked about reported diversion of Rs 400 crore to Mallya-owned entities such as Watson and Force India, and leasing of aircraft. The charge sheet also mentioned the alleged diversion of the remaining Rs 500 crore to software consulting firm UBICS and other related parties.

The probe agency stated that Kingfisher Airlines (KFA), along with IDBI Bank officials, "criminally conspired to obtain funds to the tune of Rs 860.92 crore (add interest and the amount rises to Rs 900 crore) despite weak financials, negative net-worth, non-compliance with corporate credit policy of new client, non-quality collateral security and low credit rating of the borrower, out of which Rs 807.82 crore of principal amount remains unpaid". The total loan sanctioned and disbursed by IDBI Bank to KFA was Rs 860.92 crore (add interest and the amount rises to Rs 900 crore).

"Each and every allocation of the loan amount to the said entities has been minutely explained in the filing," said an ED official. Business Standard has reviewed a copy of the charge sheet.

In the concluding remark of the charge sheet, ED said, "Vijay Mallya and others accused are guilty of money laundering under Section 3 and punishable under Section 4 of PMLA. Trial should be started against them and property attached (frozen) in the matter worth Rs 808 crore should be confiscated."

The ED has frozen Rs 9,680 crore of property belonging to Mallya and KFA, and Rs 808 crore worth of property is part of this.

The ED requested the court to confiscate this Rs 808 crore worth of property which includes Mallya's farmhouse near Mumbai, UB City Mall in Bengaluru, and his residential property in Mumbai and Bengaluru to recover the dues.

The prosecution filing also mentioned the role of other officials and executives of KFA and IDBI Bank in the matter, and appended their statements recorded by the agency under PMLA.

"IDBI Bank executives have been charged with assisting and abetting Mallya and his associates under Section 3 of PMLA," said the ED official.