A senior British executive of the Force India Formula One team, appearing as the defence witness for Vijay Mallya, vehemently denied the Indian government's allegation that the Force India Formula 1 racing team was used to illegally channel money to the liquor baron, on Monday.
Presenting her testimony at London's Westminster Magistrates Court, Margaret Sweeney, the chief financial officer of Force India, dismissed the government's claim that payments adding up to tens of millions of dollars made by Kingfisher Airlines in lieu of its sponsorship of the Force India team were given to Mallya.
Sweeney told the court that Kingfisher Airlines had entered into a 12-year partnership worth USD 122 million with Force India in 2010, but the sponsorship agreement was terminated after two years owing to the airline company's financial difficulties, thus forcing Force India to repay some of the sponsorship money back to Kingfisher Airlines.
The Government of India had claimed that several payments by Kingfisher Airlines to Force India, including two payments totalling to USD 9 million, were transferred to Mallya's personal use. To this end, Sweeney said the amount was used to make payments to Mercedes Benz, which supplies engines to Force India and to McLaren Engineering, a UK-based racing services provider.
The defence witness also responded to Indian government's claims about Kingfisher making payments greater than its contracted amount, and argued that sponsors routinely made extra payments in lieu of extra hospitality including for paddock tickets and luncheons at races around the world.
The Indian Government had also claimed that several payments made to Force India by Airbus Industries and EADS were "illegal payments" used by Mallya. However, Sweeney dismissed the claims, saying both companies made payments as they had their logos on the Force India car.
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Today was the fourth day of proceedings in Mallya's extradition case, and was attended by members of the CBI and Enforcement Directorate from India, Mallya's wife Pinky Lalvani and members of his defence team.
Mallya's defence team will later call Dr Martin Lau, Professor of South Asian Law at the School of Oriental and African Studies in London.
In the last hearing Paul Rex, a London-based banking expert called in by Mallya's defence team, said that the liquor baron wasn't aware of Kingfisher Airlines' impending failure when he sought loan from banks.
Rax pointed out "glaring gaps" in the credit analysis process done by IDBI Bank, State Bank of India and other institutions, to grant loans totaling more than Rs 2,000 crore to now-defunct Kingfisher Airlines in 2009.
The liquor baron, who is currently in London, is wanted in India for financial irregularities involving a total amount of Rs 9,000 crore as well as money laundering.
Mallya's extradition trial began at the London's Westminster court on December 4, wherein Britain's Crown Prosecution Service (CPS) outlined the Indian government's case against him.
The Indian government through CPS has been contending in the court that liquor baron had misled banks back home with regard to his company's net worth while seeking loan totalling around Rs 2,000 crore.
Mallya, who has been out on bail since Scotland Yard executed an extradition warrant in April this year, will be in the dock for the duration of the trial scheduled to end on December 14.
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