Prosecution lays out case against Vijay Mallya as extradition proceedings begin

Britain’s Crown Prosecution Service (CPS) outlined the Indian Government’s case against liquor baron Vijay Mallya, on Monday.

Mark Summers, who represented the CPS meticulously, presented the Indian authorities, making several damning revelations throughout a long and arduous day.

London’s Westminster Court was hearing India’s request to extradite the businessman.

Summers said a loan application was made to the IDBI bank in October 2009 worth Rs 950 crore, which was part of a Rs 2,000-crore application made by Kingfisher to a number of banks.

“Kingfisher had also submitted that it was confident of overcoming financial difficulties and had submitted a brand new business plan as well. The application to the IDBI bank included an approval letter from the State Bank of India (SBI). By that time SBI had already approved its portion of that Rs 2,000-crore bank package. Kingfisher also promised equity to the banks. Rs 150-crore loan was also made on October 7, 2009 to meet the short term obligations to foreign creditors,” the prosecutor added.

He further said the new business plan was also apprised and vetted by the audit firm Grant Thornton and there was a corporate guarantee from the UB group and a personal guarantee from Mallya himself.

A part of the loan was used to pay off bills at Bank of Baroda, thereby, freeing up credit at the bank, which then ended up in the Force India Formula One Team.

Clearing such bills at other banks is forbidden under the terms of IDBI’s Rs 750-crore loan.

The prosecutor even managed to obtain a No-Objection Certificate (NOC) from the SBI bank clearing the sale of United Spirits Ltd (USL) stake from United Breweries.

The prosecutor cited an e-mail in which Mallya said that he had been getting mails from IDBI and asked for his Rs 10 crore in personal funds be taken out and transferred out of USL, which had no obligations.

After IDBI bank began recovery proceedings at the Bombay High Court, the prosecutor counter sued saying personal and corporate guarantees were “invalid” because they had been obtained under “duress”.

The trial is set to continue today (Tuesday) wherein the defence team will submit its arguments all day.

The trial is expected to further continue on 6th, 7th, 11th, 12th, 13th and 14th of December.

Mallya, who shifted to the UK, is wanted in India for financial irregularities involving a total amount of Rs 9,000 crore as well as money laundering.

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