Mumbai court issues warrant against Mallya

The Hindu dated 19/4/16

he ED registered a case under the Prevention of Money Laundering Act to trace the alleged diversion of the Rs. 950 crore loan granted to Kingfisher airline by a bank.

In yet another step to secure the presence of liquor baron Vijay Mallya, the Enforcement Directorate on Monday obtained a non-bailable warrant against him from a Special Court here. The Ministry of External Affairs had earlier suspended Mr. Mallya’s passport on the ED’s advice.

Special Judge P.R. Bhavake, hearing a plea by the ED, ordered that the warrant would be issued in a case under the Prevention of Money Laundering Act.

The businessman, who left the country in the midst of efforts by a consortium of banks to recover dues from Kingfisher Airlines, did not appear before the agency in response to summons on three occasions.

A highly placed source in the ED told The Hindu: “The order copy by the court will be ready and signed on April 19, but because that day is a court holiday, the non-bailable warrant against Mr. Mallya will be issued on April 20.”

Advocate Hiten Venegavkar, representing the ED, said Mr. Mallya was summoned thrice for his statement to be recorded, but he repeatedly failed to appear before the ED. Hence, it was seeking a warrant against him.

ED officials said they would seek a Look Out Circular at all airports and ports in India in Mr. Mallya’s name on the basis of the NBW. Further, the ED would also approach Interpol for issue of a Red Notice against him.

The ED’s case is based on the FIR registered by the CBI against Mr. Mallya and other unknown officials of the Mumbai-based IDBI for causing a loss of Rs. 900 crore to the public sector bank.

The FIR was registered under Sections pertaining to criminal conspiracy, criminal breach of trust by a public servant or a banker, merchant or agent, and criminal misconduct by a public servant.

The ED has registered a case under the Prevention of Money Laundering Act and is probing why the bank gave the loan to the airline, ignoring its own internal report that had allegedly warned against such a step.

Senior counsel Amit Desai, appearing for Kingfisher Airlines (KFA) Limited, moved an application on Monday, debunking the agency’s claims that loan money was used to buy immovable property outside India.

He said these were speculative allegations and could not be a ground for coercive action.

He said the financial audit of the company, carried out in 2009 and 2010, mentioned the quantum and purpose of the loan and added that all allegations made by the ED were false.

KFA’s application said: “No funds disbursed to Kingfisher Airlines Limited by IDBI have been wrongly utilised or utilised for purposes other than legitimate business purposes/expenses of Kingfisher Airlines Limited or have been diverted in any manner by Dr Vijay Mallya for his personal benefit or gain.”

It also said: “On March 29 2016, Kingfisher Airlines Limited furnished to the ED 5 box files giving the details of foreign remittances made by Kingfisher Airlines Limited together with copies of the swift messages…”