Mumbai, June 14: The Enforcement Directorate has reportedly filed a chargesheet against absconding liquor baron Vijay Mallya in Rs 900 crore IDBI loan default case. Vijay Mallya, the fugitive liquor baron sought by Indian government for defaulting on several bank loans amounting to nearly Rs 9,000 crore, on Tuesday was granted bail till December 4 by a UK court in the extradition case against him. Vijay Mallya, the 61-year-old chief of the erstwhile Kingfisher Airlines, has been living in self-imposed exile in Britain since March last year.
The ED chargesheet against Vijay Mallya may have included statements from numerous executives and investigation of assets and transactions of the accused from both the Kingfisher Airlines (KFA) and the IDBI. A similar dossier has been filed by the CBI in a court in Mumbai in January. ED is probing this alleged loan fraud case under the Prevention of Money Laundering Act (PMLA). The filing of chargesheet will go on to strengthen India’s extradition request against Vijay Mallya from the UK even as the CBI charge sheet has already paved the way for his handover.
IDBI loan default case
ED had registered a criminal case in Rs 900 crore IDBI loan default case last year under the provisions of PMLA. In its probe report prepared in this case, accessed by Press Trust of India, the agency had said, “The money trail analysis revealed that out of the loan of Rs 860.92 crore, sanctioned and disbursed by IDBI, Rs 423 crore has been remitted out of India. The said payments were shown to be made towards aircraft rental leasing and maintenance, servicing and spare parts.”
The investigations conducted so far, the PTI report said, found KFA along with IDBI bank officials “criminally conspired to obtain funds to the tune of Rs 860.92 crore despite weak financials, negative net-worth, non-compliance of corporate credit policy of new client, non-quality collateral security and low credit rating of the borrower, out of which Rs 807.82 crore of principal amount remains unpaid”.
“Investigation revealed that KFA brand was accepted as collateral security and the valuation for Kingfisher brand as accepted by the bank as Rs 3,400 crore without independent verification,” it said, adding the firm that did the brand valuation had submitted three different amounts of this estimate between 2008-12.
“Thus, it indicates how volatile is this (brand value) intangible fictitious asset and needs to be evaluated frequently, particularly in aviation sector which itself is very unpredictable and was going through a very rough phase and brand valuation was wholly based on projections provided by Ms KFA. “Hence, it would not be prudent to accept brand value of 2008, while considering loan sanction in 2009,” it said.