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Mallya has case of fraud to answer, UK court told

Press Trust of India  |  London 

The extradition trial of Vijay Mallya, wanted in on charges of Rs 9,000 crores and money laundering, today began at a here, with the prosecution asserting that the embattled baron had a "case of fraud" to answer.

The trial, however, was briefly halted as the courtroom had to be evacuated due to a fire alarm. The 61-year-old tycoon and others waited outside the Westminster magistrates during the fire drill.


The trial began with the Crown Prosecution Service (CPS), arguing on behalf of the Indian government, presenting its opening arguments in the case which focussed on loans totalling around Rs 2,000 crores sought by the erstwhile Airlines from a consortium of Indian banks.

The CPS admitted that there may have been "irregularities" in the internal processes of the banks sanctioning some of those loans but that would be a question to be dealt with at a later stage in

"The focus of our case will be on his (Mallyas) conduct and how he misled the bank and misused the proceeds," said CPS barrister Mark Summers. He then went on to lay out a detailed chronology of events, with specific focus on a loan sought by Airlines from IDBI bank in November 2009.

The loan sought amounted initially to Rs 950 crores but was later reduced to Rs 750 crores, after it had received Rs 200 crores from UCO bank.

Meanwhile, Mallya was also sanctioned a loan of Rs 150 crores from IDBI in advance of the larger loan sought from the state-owned bank to meet "critical obligations to overseas vendors".

The CPS noted that in all the loans sought, "loss-making" Airlines had relied on nearly the same set of security pledges, which included the UB Groups reputation, Kingfishers own "brand value", a promised infusion of equity funds and a projected return to profit by the airline by February 2011.

"The airline had claimed that it had put proactive measures in place to improve performance," the CPS noted.

However, it was also a time when according to an industry analysis, the state of the airline industry was described as "grim" and as being in "intensive care".

"It was not a scenario in which a state bank would have entertained such loan requests," the CPS added.

was told that loans acquired in the name of rescuing Airlines were in fact used to pay off other debts, including paying the rent on a corporate jet "owned by but operated for the defendant's (Mallya) own benefit".

The CPS presented an email written by Mallya in December 2009 justifying the use of loans to "achieve round robins", confirming that he was open to using money received from banks for Airlines to repay other banks to settle overdue bills and charges.

This was "expressly prohibited" as part of the agreed terms of the loans provided to the then struggling airline, it said.

The first day of the trial is expected to be taken up entirely by the CPS setting out the Indian governments prima facie case against Mallya, a fact that was not welcomed by his defence team.

Mallya's barrister, Clare Montgomery, told the judge that she had hoped to set out the defences opening arguments on the first day as well.

But the CPS said it will "not be rushed" as it lays out the complete chronology of events.

Meanwhile, Mallya watched the proceedings from behind a glass-windowed dock.

His defence team tried to get the judge to allow him to sit outside the dock near his defence team to access some of the complicated paperwork being relied upon, but the judge denied that request saying all defendants are expected to sit in the dock.

However,the judge has directed that a table be provided to Mallya for easier access to his paperwork.

Earlier, Mallya looked relaxed when he entered the to stand trial on charges of and money laundering related to his erstwhile Airlines owing several Indian banks around Rs 9,000 crores.

"These (allegations against me) are false, fabricated and baseless," Mallya told reporters outside the ahead of the hearing.

A four-member CBI and Enforcement Directorate (ED) team from had also arrived at the ahead of the trial, one of whom nodded when asked he they were "confident" about their case.

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.

A judgement in the case, being presided over by Judge Emma Louise Arbuthnot, is unlikely until early next year.

The CPS will need to demonstrate a prima facie case by producing evidence to show that the criminal charges against Mallya are justified and that he should be extradited to face the Indian courts.

Prison conditions in are expected to be at the forefront during the hearing, with the Indian providing assurances of protection of Mallya's human rights.

The tycoonhas been on self-imposed exile in the since he left on March 2, 2016.

While on strict bailconditions, which includeproviding a bail bond worth 650,000 pounds, surrender of his passport and a ban on possessing any travel documents, the former Rajya Sabha memberhas been based at his Hertfordshire estate Ladywalk in the village of Tewin, nearly 50-km from London.

The CPS had presented "supplemental" charges of money laundering to previous charges of against the businessman at an earlier hearing in October.

The judge had agreed to effectively re-open a fresh case so that all charges can be heard concurrently in

If the judge rules in favour of extradition at the end of the trial, the UKhome secretary must orderMallyas extradition within two months.

However, the case can go through a series of appeals in higher courts before arriving at a conclusion.

Judge Arbuthnot and her colleague, Rebecca Crane, at Westminster Magistrates have recently rejected two other long-pending extradition requests from

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, December 04 2017. 22:15 IST
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