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Mallya has case of fraud to answer, UK court told

Tuesday, December 05, 2017
By Aditi Khanna

London: The extradition trial of Vijay Mallya, wanted in India on charges of Rs 9,000 crores fraud and money laundering, today began at a UK court here, with the prosecution asserting that the embattled liquor baron had a "case of fraud" to answer.

The trial, however, was briefly halted as the courtroom had to be evacuated due to a fire alarm. The 61-year-old tycoon and others waited outside the Westminster magistrates court during the fire drill.

The trial began with the Crown Prosecution Service (CPS), arguing on behalf of the Indian government, presenting its opening arguments in the case which focussed on loans totalling around Rs 2,000 crores sought by the erstwhile Kingfisher Airlines from a consortium of Indian banks.

The CPS admitted that there may have been "irregularities" in the internal processes of the banks sanctioning some of those loans but that would be a question to be dealt with at a later stage in India.

"The focus of our case will be on his (Mallya’s) conduct and how he misled the bank and misused the proceeds," said CPS barrister Mark Summers. He then went on to lay out a detailed chronology of events, with specific focus on a loan sought by Kingfisher Airlines from IDBI bank in November 2009.

The loan sought amounted initially to Rs 950 crores but was later reduced to Rs 750 crores, after it had received Rs 200 crores from UCO bank.

Meanwhile, Mallya was also sanctioned a loan of Rs 150 crores from IDBI in advance of the larger loan sought from the state-owned bank to meet "critical obligations to overseas vendors".

The CPS noted that in all the loans sought, "loss-making" Kingfisher Airlines had relied on nearly the same set of security pledges, which included the UB Group’s reputation, Kingfisher’s own "brand value", a promised infusion of equity funds and a projected return to profit by the airline by February 2011.

"The airline had claimed that it had put proactive measures in place to improve performance," the CPS noted. However, it was also a time when according to an industry analysis, the state of the airline industry was described as "grim" and as being in "intensive care".

"It was not a scenario in which a state bank would have entertained such loan requests," the CPS added.

The first day of the trial is expected to be taken up entirely by the CPS setting out the Indian government’s prima facie case against Mallya, a fact that was not welcomed by his defence team.

Mallya's barrister, Clare Montgomery, told the judge that she had hoped to set out the defence’s opening arguments on the first day as well. But the CPS said it will "not be rushed" as it lays out the complete chronology of events.

Meanwhile, Mallya watched the proceedings from behind a glass-windowed dock.

His defence team tried to get the judge to allow him to sit outside the dock near his defence team to access some of the complicated paperwork being relied upon, but the judge denied that request saying all defendants are expected to sit in the dock.

However, the judge has directed that a table be provided to Mallya for easier access to his paperwork.

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