A special CBI court in Mumbai issued a non-bailable warrant against Vijay Mallya for a Rs.180 crore loan default case linked to Indian Overseas Bank. Judge S.P. Naik Nimbalkar responded to CBI submissions, citing Mallya’s fugitive status and issuing an open-ended NBW to ensure his presence.
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MUMBAI: A special CBI court in Mumbai has issued a non-bailable warrant (NBW) against fugitive businessman Vijay Mallya in connection with a loan default case involving Rs.180 crore linked to the Indian Overseas Bank (IOB). The court’s decision, made on June 29, was detailed in an order made available on July 1.
Presiding over the special CBI court, Judge S.P. Naik Nimbalkar responded to submissions by the Central Bureau of Investigation (CBI) which highlighted Vijay Mallya’s status as a “fugitive.” Considering the previous non-bailable warrants issued against Mallya, the judge declared-
“This warrants issuing an open-ended NBW against him to ensure his presence.”
The origins of the case trace back to allegations that Vijay Mallya, the promoter of the now-defunct Kingfisher Airlines, deliberately defaulted on loan payments, causing a significant financial loss to the government-owned Indian Overseas Bank. The Central Bureau of Investigation (CBI) asserts that these actions resulted in wrongful losses amounting to more than Rs.180 crore.
The CBI, in its submissions to the court, emphasized Mallya’s continued evasion of Indian authorities. Despite previous warrants, he remains elusive, necessitating the issuance of an open-ended NBW. The court took into account Mallya’s extensive history of avoiding legal proceedings in India, which bolstered the argument for stringent measures to ensure his presence.
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Judge Nimbalkar stated-
“Due to the gravity of the allegations and significant financial loss to Indian Overseas Bank, securing Vijay Mallya’s presence for a fair trial is crucial. The court deems it necessary to issue an open-ended non-bailable warrant against him.”
Vijay Mallya has been a controversial figure in India, primarily due to his high-profile lifestyle and subsequent financial controversies. As the head of Kingfisher Airlines, he was initially celebrated as a successful entrepreneur. However, the airline’s financial troubles and Mallya’s inability to repay loans led to a drastic fall from grace. The Rs.180 crore loan default case is one of several financial fraud allegations against him.
The CBI has been relentless in pursuing Mallya, aiming to bring him back to India to face legal proceedings. Their efforts have included international cooperation and attempts to extradite him from the United Kingdom, where Mallya has been residing since he fled India in 2016.
In a statement, the CBI said-
“We are determined to bring Vijay Mallya to justice. His intentional default on loan repayments and evasion of legal proceedings have inflicted substantial financial harm on Indian financial institutions. Issuing an open-ended NBW is a pivotal step in our ongoing pursuit of accountability.”
The financial losses caused by Mallya’s actions have had far-reaching consequences, impacting not only the Indian Overseas Bank but also the broader banking sector in India. The case has drawn widespread attention, highlighting the need for stringent measures against financial defaulters to protect the integrity of the financial system.
London-based businessman Vijay Mallya, already declared a fugitive economic offender in an ongoing money laundering case by the Enforcement Directorate (ED), is now facing extradition attempts by the Indian government. The latest warrant against Mallya pertains to allegations of cheating, as filed by the Central Bureau of Investigation (CBI), which accuse him of misappropriating loans that were originally intended to support the operations of Kingfisher Airlines between 2007 and 2012.
The CBI’s recent chargesheet highlights that these funds were part of credit facilities provided under an agreement with a consortium of banks. According to the document, Mallya diverted the loaned money, which resulted in significant financial losses.
In 2010, the Reserve Bank of India (RBI) issued directives allowing a one-time relaxation of guidelines for the aviation sector. Following these directives, a consortium of 18 banks, including Indian Overseas Bank (IOB), restructured Kingfisher Airlines’ debts under a Master Debt Recast Agreement (MDRA). The chargesheet specifies that Mallya’s actions not only included false promises but also the diversion of funds for unauthorized purposes.
“The CBI chargesheet alleges that Mallya made false promises and diverted the loaned funds for purposes other than those agreed upon.”
-states the chargesheet.
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Furthermore, the chargesheet claims that Mallya’s financial maneuvers led to a direct financial loss of Rs.2141.91 crore due to defaults on the loans, and an additional loss of Rs.238.30 crore as a result of converting some of these loans into shares.
“The chargesheet also alleges that Mallya’s actions resulted in a direct financial loss of 2141.91 crore due to loan defaults, with an additional loss of 238.30 crore due to the conversion of some loans into shares.”
-elaborates the document.
The Indian government is intensifying its efforts to extradite Mallya, seeking to bring him back to India to face these serious charges. The ongoing legal battle has attracted considerable attention, given Mallya’s high-profile status and the large sums of money involved.
“The Indian government is actively pursuing his extradition.”
– a government official commented on the case.
Mallya’s legal troubles have been mounting since his departure from India. Declared a fugitive by Indian authorities, he has been residing in London and fighting multiple legal battles. The extradition process has been prolonged, with Mallya employing various legal strategies to avoid being sent back to India. His case has become a symbol of the larger issue of economic offenders fleeing the country to evade prosecution.
The restructuring of Kingfisher Airlines’ debts under the MDRA was initially seen as a lifeline for the struggling airline, which was once among India’s premier carriers. However, the subsequent allegations of financial misconduct and loan diversion have cast a shadow over these efforts.
“In response to directives from the Reserve Bank of India (RBI) in 2010, which allowed for a one-time relaxation of guidelines for the aviation sector, a consortium of 18 banks, including IOB, restructured Kingfisher’s debts under a Master Debt Recast Agreement (MDRA).”
– details the chargesheet.
