Double whammy for Vijay Mallya: ED files case, DRT blocks $75 million in Diageo deal

March 8, 2016

Mumbai/New Delhi/Bengaluru, Mar 8: In a double blow to beleaguered business tycoon Vijay Mallya on Monday, the Enforcement Directorate (ED) in Mumbai lodged a money laundering case and the Debt Recovery Tribunal (DRT) in Bengaluru barred British liquor giant Diageo from paying him anything till a case against him was disposed off.

vijaymallyaThe tribunal barred Diageo plc from paying Rs 5.04 billion ($75 million) as a severance package to Mallya who quit the chairmanship of its Indian company, United Spirits Ltd. last month, till the pending case against the liquor baron before it is decided.

"The presiding officer of DRT (R. Benkanahalli) ordered temporary attachment of the severance package amount and directed Diageo not to pay it till our case is finally heard and disposed of," counsel for State Bank of India (SBI) told media persons in Bengaluru.

Reading out the one-page order, Benkanahalli said Mallya shall not temporarily draw the $75 million mentioned in the interlocutory application till the case`s disposal.

"Diageo plc and United Spirits Ltd shall not disburse the amount ($75 million) to Mallya or his nominees or agents till the disposal of the bank`s original application (OA). Amount as sought by the applicant banks stands attached," the order said.

The tribunal also directed all defendants to furnish details of the agreement on or before the next date of hearing (March 28), when it will hear the bank`s three other interlocutory applications, seeking his arrest, impounding of his passport and seizure of his assets.

It also ordered issuing notice on the bank`s application to Diageo office in London through registered post.

A consortium of 17 state-run and private banks led by SBI filed the application on February 26, a day after Diageo signed the deal with Mallya for resigning as chairman and not competing with it in the spirits business worldwide for the next five years for $40 million this year and the balance ($35 million) over the next four years.

According to the SBI counsel, Mallya`s now defunct Kingfisher Airline owes the consortium a whopping Rs.10,000 crore, including compound interest over the remaining combined loans of Rs.7,800 crore borrowed between 2004-12 before it was grounded and shut down subsequently.

In another major blow for Mallya, the ED on Monday registered a money-laundering case against him.

"We have filed a case against Mallya on Monday. The case is specifically based on the case registered by the CBI against him and others in (October) 2015," Assistant Director (Enforcement Directorate) A.K. Rawal said in New Delhi.

Mallya and the top executives of the erstwhile KFA have been booked under Sections 3 and 4 of the Prevention of Money Laundering Act (PMLA), Rawal said.

The measure follows an audit of the Rs 7,200 crore loan that the bank consortium had extended to the airline but was not repaid.

The KFA is alleged to have diverted as much as Rs.4,000 crore of that money to international tax havens like Mauritius and Cayman Islands, which is being probed by the ED and the Central Bureau of Investigation (CBI).

Other businesses of Mallya were also being scrutinized by the ED under the PMLA, an official, requesting anonymity, told IANS in Mumbai.

It is feared that Mallya might become a fugitive from law by shifting base to a country where it might be difficult to make him face the Indian laws, officials said.

The flamboyant businessman, who recently announced his plans to spend more time with his family in Britain, has refuted all charges against him and taken exception to being labelled as a "wilful defaulter" by some of the lender banks.

Mallya has also denied he was planning to flee the country and said he was ready to cooperate with the lenders and the agencies to settle the debt.

Though the consortium of lenders moved the tribunal in 2013 for recovery of their outstanding loans, Mallya`s dramatic announcement that he would move to London forced the banks to lay first claim on the deal amount and rush to the tribunal for early hearing of its case.

Perceived as the `King of Good Times`, Mallya was recently in the news when some former airlineemployees wrote an open letter, blaming him for the grounding of the airline and damaging the country`s reputation in the aviation industry.

Once reputed as the most glamorous and luxurious private airline in the country, KFA fell into bad days and was grounded in October 2012 after a huge financial mess, including default of bank loans, dues to oil companies, airports and even staff salaries.

Comments

Rikaz
 - 
Tuesday, 8 Mar 2016

No matter what, he should not have stopped paying for his employees...it is their curse...that brought him to this stage....

karan
 - 
Tuesday, 8 Mar 2016

this same SBI bank and other bank need all the document and everything if poor guy have they will not provide even 20,000 of loan, and here mally did wonderful job, dont pay even one rupee to them all this bank eaten poor people's money.

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News Network
July 19,2020

New Delhi, Jul 19: Blaming the BJP for the political drama in Rajasthan, senior Congress leader Digvijaya Singh on Sunday asked Sachin Pilot not to leave the grand old party.

In an interview to news agency, the former Madhya Pradesh chief minister said Pilot should not follow Jyotiraditya Scindia into the BJP, as he has bright future in Congress.

His remarks follow Pilot's open rebellion against the Ashok Gehlot government, which has been on shaky ground with at least 18 legislators backing the rebel leader.

Pilot was sacked as Rajasthan deputy chief minister and the state Congress chief recently and the Congress has accused the BJP of making efforts to topple the Gehlot-led government by indulging in horse-trading.

"The BJP is behind the crisis in Rajasthan," Singh said.

The Congress veteran said he tried to call Pilot but his calls and text messages went unanswered.

"Age is on your side. Ashok (Gehlot) may have offended you, but all such issues are best resolved amicably. Dont make the mistake that Scindia made. BJP is unreliable. Nobody who joined it from any other party has succeeded there," Singh said.

He said this is the first time that Pilot hasn't responded to him.

"Sachin is like my son. He respects me and I also like him. I called him three-four times and also texted him. He didn't revert. He used to respond immediately earlier," he said.

"It is good to be ambitious. How can one move forward without having ambitions, but along with ambition, one must also have commitment to your organisation, ideology and the nation," Singh said.

For latest updates on the Rajathan Political Crisis, click here

"I heard that he (Pilot) may form a new party. But what is the need for it. Has Congress not given him anything? He was made an MP at 26, a Union minister at 32, the state Congress president at 34 and deputy chief minister at 38. What else does he want? Time is on his side," Singh said.

If Pilot had any issue, then as the state party unit president, he should have called a meeting and discussed the matter, he said. Pilot could have involved Congress national general secretary and Rajasthan in-charge Avinash Pande in talks with Gehlot to resolve differences, he added.

"If you have faith in your legislators, why have you have confined 18-19 of them in ITC Grand hotel at Manesar in Haryana," Singh said.

This is the same hotel where the BJP kept MLAs from Maharashtra, Karnataka and Madhya Pradesh (during political dramas in those states), he said.

Pilot should forget whatever has happened, come back and sit across the table to discuss how Congress could be strengthened, he said

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News Network
February 14,2020

New Delhi, Feb 14: AAP convenor Arvind Kejriwal has invited Prime Minister Narendra Modi to his swearing-in ceremony scheduled to take place at the Ramlila Maidan on February 16, senior party leader Gopal Rai said on Friday.

Rai, the convenor of the Aam Aadmi Party's Delhi unit, said a letter was sent to the prime minister on Friday morning.

All seven Delhi MPs and eight newly-elected BJP MLAs have also been invited for the oath-taking ceremony, Rai told news agency.

No chief minister or political leaders from other states will be part of the event as it will be a "Delhi-specific" ceremony, Rai had said on Thursday.

Kejriwal, through front-page advertisements in newspapers, has urged Delhiites to attend his oath-taking ceremony as he is set to become the chief minister of Delhi for the third consecutive term.

Kejriwal will take oath as Delhi Chief minister along with his cabinet at Ramlila Maidan at 10 am on Sunday.

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News Network
June 13,2020

New Delhi, Jun 13: About 56 per cent of children were found to have no access to smartphones which have emerged as essential tools for online learning during the coronavirus-induced lockdown, according to a new study that surveyed 42,831 students at various school levels.

The study ''Scenario amidst COVID 19 - Onground Situations and Possible Solutions'' was conducted by child rights NGO Smile Foundation with an aim of analysing the access to technology.

The findings of the study showed that 43.99 per cent of surveyed children have access to smartphones and another 43.99 per cent of students have access to basic phones while 12.02 per cent do not have access to either smartphones or basic phones.

A total of 56.01 per cent children were found to have no access to smartphones, the study said.

"Concerning television, it was noted that while 68.99 per cent have access to TV, a major chunk of 31.01 per cent does not. Hence suggesting that using smartphone interventions for enhancing learning outcomes is not the only solution," it said.

At the primary level of education (class 1 to 5) 19,576 children were surveyed while at upper primary level (class 6 to 8) 12,277 children were surveyed. At secondary level of education (class 9 to 10) 5,537 children were surveyed and at higher secondary level (class 11 to 12) 3,216 children were surveyed.

The survey based on which the study was conducted used two approaches - over the telephone wherein the NGO reached out to the children whose database it already had -- students enrolled in various education centres of the NGO -- and second was through community mobilization wherein community workers went door to door to get answers.

The survey was conducted in 23 states, including Delhi, Gujarat, Maharashtra, Karnataka, Tamil Nadu, West Bengal, Andhra Pradesh, Telangana, Uttar Pradesh, Haryana, over a period of 12 days from April 16 to April 28.

The lockdown induced by the COVID-19 pandemic in March prompted schools and colleges to move to the virtual world for teaching and learning activities. However, many experts say the digital divide in the country may turn online classes into an operational nightmare.

As per official statistics, there are over 35 crore students in the country. However, it is not clear as to how many of them have access to digital devices and Internet.

Santanu Mishra, co-founder and executive trustee, Smile Foundation, said the findings clearly show that the digital divide is a real challenge, and multiple approaches need to be implemented to cater to all across the nation.

"As an exercise before we start any programme, we do a baseline study to understand the on-ground challenges so that our programmes can bring in real work and real change. With the onset of the pandemic, following indefinite school closures, it is more important than ever to understand the situation and how can we ensure that children are given quality education. Through this, we understand that customized modules need to be built in accordance with the channel of communication," he said.  

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