Highlights of Mallya’s dubious business activities in India.
By Sreekanth A. Nair
The collective bad debt of Indian banks is estimated to be around $17 billion. The Reserve Bank of India (RBI) has been giving directions to banks to take strict action and get out of the bad-debt dilemma.
This is the time when the Vijay Mallya issue emerged and gained national attention. The liquor baron who left India on March 2 owes about $1.4 billion to Indian banks. He is now living in a mansion in the UK.
The Ministry of External Affairs (MEA) has already revoked the passport of Mallya and has written to the UK government asking him to be deported to India.
The issue has triggered a political battle between the ruling BJP and the Congress, with the latter accusing the former of helping Mallya flee India freely.
Have a look at some of the lesser known facts related to the case.
During 2005-2014, Mallya invested about $478 million in the now defunct Kingfisher airlines through 62 odd companies. Interestingly most of these companies are owned by Mallya himself.
Mallya got all these companies from his father Vittal Mallya who bought them when there was total prohibition of liquor when Morarji Desai was the prime minister of India. But the loss-making companies started making a profit when the ban was lifted later on. Mallya is in trouble now, when another prime minister from Gujarat, Modi, just like Desai, is ruling the country.
Investigators, who have gone through the accounts of Kingfisher Airlines, are yet to arrive at a conclusion about transferring funds to foreign countries. The banks to which Mallya owes huge money were also not ready to conduct a forensic audit of the accounts. They are of the view that it’s a clear case of a bad decision by bankers. But the government, however, has rejected the claim and asked the Enforcement Directorate to conduct a detailed inquiry.
The Central Bureau of Investigation (CBI) had sought the help of FBI to find out the transfer of money from India to the US when Mallya bought a helicopter from the US. But the investigation of FBI didn’t find any fault with the deal.
The Enforcement Directorate (ED) is saying that they have found a huge amount of money transferred by Mallya from India to overseas. But in many cases like this, the ED has failed to submit sufficient evidence to the court and win the case. As an IPS officer is leading the ED now, the success rate is higher.
When the CBI tried to freeze Mallya’s foreign accounts, the court directed it not to go ahead with the decision unless it collects sufficient evidence against Mallya. But even after examining the accounts of the company, CBI haven’t found any hint of money being transferred to any foreign country.
Many experts also feel that the CBI didn’t investigate the case with due importance until Mallya left India and it gained national attention. It’s only after some officials from the Prime Minister’s Office (PMO) started following the case, that it picked up heat.