CBI charge sheet in loan default case opens way for Mallya extradition

11 accused in Rs 1,300-crore loan default case; Rs 263 crore channelled to businessman's accounts

The Central Bureau of Investigation (CBI) on Tuesday filed chargesheets against 11 accused, including businessman Vijay Mallya, in the Rs 1,300-crore loan default case, raising hopes of his extradition from the UK.

The ex-chairman of United Spirits has been living in the UK since leaving India in March last year. “We were facing legal issues in getting him (Mallya) back to India, as the overseas authorities require a chargesheet to initiate the process,” said a senior CBI official.

The other accused are Kingfisher Airlines, its executives and former IDBI Bank officials. Nine of the accused were sent to judicial custody till February 7, but they can contest for bail on January 30.

The chargesheet followed the arrest of former IDBI Bank chairman Yogesh Agarwal and four other former IDBI employees — B K Batra, S K V Srinivasan, O V Bundellu and R S Sridhar. Kingfisher Airlines executives named in the chargesheet are Kingfisher Chief Financial Officer A Raghunathan, and executives Shailesh Porkar, Amit Nadkarni and A C Shah.

In its 2,000-page chargesheet, CBI presented 76 witnesses and 570 documents to support its case. The agency invoked charges of the corruption act and criminal conspiracy, along with Section 420 of the Indian Penal Code.

CBI on Monday arrested former IDBI Bank chairman Yogesh Aggarwal and on Tuesday produced him before a session court in Mumbai. Photo: PTI

According to the chargesheet, IDBI Bank’s total loss stood at Rs 1,300 crore, of which Rs 263.5 crore was transferred to Kingfisher Airlines’ accounts in Axis Bank (Rs 169.6 crore), ICICI Bank (Rs 39 crore) and Bank of Baroda (Rs 54 crore), from where funds were transferred to other Kingfisher Airlines accounts.

This amount (Rs 263 crore) was never used for the purpose it was sanctioned by IDBI Bank: To meet obligations to overseas vendors. The chargesheet also provided a break-up of amounts used for other purposes.

The chargesheet stated that three loans of Rs 750 crore, Rs 200 crore and Rs 150 crore were sanctioned and disbursed by IDBI Bank to Kingfisher Airlines. It also pointed out that despite the company having a negative net worth and not satisfying the corporate loan policy of the bank, the credit committee, which included Batra and Bundellu, sanctioned the loan on October 7, 2009. The loans were approved by accepting as security the hypothecation and assignment of the Kingfisher brand, finance lease aircraft, a corporate guarantee from United Breweries Holdings and a personal guarantee from Mallya.

Along with the chargesheet, CBI had also filed remand application of all the accused. It said, “Though the chargesheet has been filed, further investigation in the case is still going on.” The agency would now send an extradition request to the UK authorities through diplomatic channels and expect to bring Mallya to India, the CBI official said.

Both CBI and the Enforcement Directorate have issued summons to Mallya in the past 11 months but he has not joined the investigation.

Mallya is facing CBI probe for defaulting on repayment of loans of Rs 950 crore taken from IDBI Bank. In total, Mallya owes several banks a total of as much as Rs 9,000 crore. CBI had registered the case in November 2015, against all accused mentioned above. The agency had later expanded the probe to include loan defaults of all other banks.