ED set to file fresh charge sheet against Vijay Mallya for money laundering

In more trouble for liquor baron Vijay Mallya, the Enforcement Directorate (ED) is set to soon file a fresh charge sheet against him and his companies on charges of money laundering and allegedly creating a consortium of nationalised banks to the tune of Rs 60.27 billion, officials said on Sunday.

With this charge sheet (also known as the prosecution complaint), official sources told PTI, the central probe agency will immediately seek from a court permission to "confiscate" more than Rs 90 billion worth assets of the beleaguered businessman and his firms under the recently promulgated Fugitive Economic Offenders Ordinance.

The ED last year had filed its first charge sheet against Mallya, now in London, in the about Rs 9 billion IDBI bank-Kingfisher Airlines (KFA) alleged bank loan fraud case.

It has attached assets worth Rs 98.90 billion in this case till now.

The forthcoming charge sheet will revolve around the complaint received from the State Bank of India (SBI) on behalf of the consortium of banks for causing loss of Rs 60.27 billion to them by not keeping repayment commitments of his loan (by Mallya firms) taken during 2005-10, they said.

The ED has based its investigation in this instance after taking cognisance of a CBI FIR and the charge sheet will be filed before a special court in Mumbai under the Prevention of Money Laundering Act (PMLA).

It was alleged that SBI and its consortium banks had advanced various credit facilities to KFALimited during the period between 2005 and 2010.

During 2009-10, the company failed to meet its repayment commitments to the bank from whom it had availed credit facilities and the airlines did not keep its account with the consortium banks regular which became NPA (non performing asset), the CBI FIR had stated.

The consortium banks, therefore, recalled credit facilities and also invoked corporate guarantee of UBHL (united breweries holdings limited) and personal guarantee of Mallya, it had alleged.

It was alleged that there was a conspiracy among group companies promoter and unknown others to cheat the lenders, the CBI had said.

The ED, officials said, had found that a maze of shell or dummy firms were used to allegedly siphon off these funds and this is expected to be stated in the upcoming charge sheet.

The agency, empowered by the Union government to enact the new fugitive ordinance in the country, will seek an official declaration to categorise Mallya as a "fugitive" on the basis of the cognisance of this prosecution complaint (charge sheet).

Mallya is contesting these charges in London as part of India's efforts to extradite him from there and face the legal system here in connection with these charges.

The central probe agency had recently begun the work to bring together the existing cases of high-value bank loan defaulters for getting them notified under the new legislation.

As per the existing process of law under the PMLA, the ED can confiscate assets only after trial in a case finishes which usually takes many years.

The Modi government brought the ordinance as "there have been instances of economic offenders fleeing the jurisdiction of Indian courts, anticipating the commencement, or during the pendency, of criminal proceedings," the government said.

The Fugitive Economic Offenders Bill, 2018 was introduced in the Lok Sabha on March 12 but couldnt be taken up due to logjam in Parliament over different issues.

With Parliament being adjourned sine die, an ordinance was proposed.

The Union Cabinet on April 21 approved the ordinance and the President gave his assent to promulgation of the same a day later.

The ordinance makes provisions for special courts under the Prevention of Money Laundering Act, 2002 to declare a person as a fugitive economic offender and order immediate confiscation of assets.

"A Fugitive Economic Offender is a person against whom an arrest warrant has been issued in respect of a scheduled offence and who has left India so as to avoid criminal prosecution, or being abroad, refuses to return to India to face criminal prosecution," the government said.

Cases of frauds, cheque dishonour or loan default of over Rs 1 billon would come under the ambit of this ordinance.

The ordinance offers necessary constitutional safeguards in terms of providing hearing to the person through counsel, allowing him time to file a reply, serving notice of summons to him, whether in India or abroad and appeal before the high court.