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
March 24,2020

New Delhi, Mar 24: The total number of active COVID-19 cases reported so far in the country stands at 446 while the number of people who have been cured or discharged stands at 36, according to the Ministry of Health and Family Welfare.

Nine people have died from the disease while one case has migrated, the Ministry further informed.
The Central government has taken several steps to contain the rapid spread of the virus, including stoppage of all incoming passenger traffic on 107 immigration check posts at all airports, seaports, land ports, rail ports, and river ports.
There is a complete lockdown in as many as 548 districts of the country affecting several hundred million people.
The Indian Railways has also cancelled all passenger train operations till March 31.

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Agencies
May 26,2020

The Shopping Centres Association of India (SCAI) on Monday said the sector has lost over Rs 90,000 crore in the last two months, owing to the lockdown, and market players need much more than the repo rate cut and the loan moratorium extended by the RBI.

In a statement, the industry body said that the Reserve Bank of India's (RBI) relief measures are not adequate to support the liquidity needs of the industry.

According to the SCAI, there is a common misconception that the shopping centres' industry is centred around metros and large cities with investments only from large developers, private equity players and foreign investors.

"However, the fact is that most malls are part of the SMEs or standalone developers. i.e. more than 550 are single owned by standalone developers out of the 650-odd organised shopping centres across the country and there are 1,000+ small centres in smaller cities," it said.

Amitabh Taneja, Chairman of SCAI said: "The organised retail industry is in distress and has not earned anything since the lockdown and their survival is at stake. While the extension of the loan moratorium talks about some relief on repayment but won't help the industry in liquidity."

He said that a long term beneficial plan from the government is much required to revive the sector.

"Being the most safe, accountable, and controlled environment, unfortunately, malls have not been permitted to open which will lead to job losses and might even shut shops for a lot of mall developers," Taneja said.

In its representations to the Centre and the Reserve Bank of India, the association has also pointed out that, in absence of financial package and stimulus from the RBI, over 500 shopping centres may go bankrupt, that may lead to the banking industry staring at NPAs of Rs 25,000 crore.

The industry body has put forward its recommendations and requests to the government. It had sought moratorium till March 2021 at the least in terms of repayment of bank loans, interest, EMI and so on, without levy of any penalties or penal interest.

It has also sought a one-time loan restructuring with lower rates of interest, permitted for shopping centres and a facilitative and forward-looking support provision of short-term financing options for a period of six to 12 months, at lower interest rates, to meet the increased working capital requirements.

Among other relaxations, it had also appealed for GST rebates to offset the losses on account of and for the period of closure of business.

It also said that interest rates should be brought down to "manageable levels" of 5-6% in view of the precarious financial situation.

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News Network
March 30,2020

Kochi, Mar 30: Kerala High Court on Monday granted interim bail to the under-trial prisoners and remanded accused in the state till April 30 in view of the lockdown imposed to prevent the spread of coronavirus.

The court said that the accused should report to the local police station immediately after getting bail. Those released on bail must strictly follow the lockdown instructions, the High Court said.

"Those who have been convicted of imprisonment for less than seven years will get bail. Prison Superintendents will release the prisoners who are eligible. But regular offenders are not entitled to get bail," the court said.

After the bail period, the accused should appear in the respective trial courts, where a decision will be taken on their bail by the respective trial courts.

The Supreme Court had last week asked all state governments to release undertrial prisoners, who are facing charges attracting less than seven years imprisonment, to reduce overcrowding of jails amid the ongoing coronavirus scare.

So far, 194 confirmed cases of coronavirus have been reported in the state.

The country is under a 21-day lockdown to prevent the spread of coronavirus, which according to the Ministry of Health and Family Welfare has claimed the lives of 29 people and infected a total of 1071 people as on Monday morning.

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