Mallya arrested, again

Indian business tycoon Vijay Mallya has been arrested in the London. This is the second time the former politician has been arrested in Britain. Vijay Mallya is an Indian businessman..

Indian business tycoon Vijay Mallya has been arrested in the London.

This is the second time the former politician has been arrested in Britain.

Background

Vijay Mallya is an Indian businessman. The son of businessman Vittal Mallya, he is the ex-chairman of United Spirits Ltd., the largest spirits company in India. He is still the Chairman of UB Group, an Indian conglomerate with interests in beverage alcohol, aviation infrastructure, real estate and fertilizer among others. He has been the Chairman of Sanofi India (previously known as Hoechst AG and Aventis) as well as the Chairman of Bayer CropScience in India for over 20 years. He is the co-owner of the F1 team Force India and also owns the Indian Premier League cricket franchise Royal Challengers Bangalore.

He is a controversial figure in the Indian landscape. In 2016, it was revealed that 3,000 employees of the now defunct Kingfisher airlines had not been paid. According to some estimates, it amounts to over Rs 300 crores. Some of the employees wrote an open letter at the time noting, “"We are still not able to understand what you meant when you said 'I don't have money to pay your salaries' while the spree continues, be it the Caribbean Premier League or luxury yachts.”

In August 2014, State Bank of India alleged that funds were diverted several times from Kingfisher Airlines to various UB Group companies and other firms.

In 2016, the flamboyant entrepreneur fled India and went to UK. A group of banks had been trying to recover around Rs. 9,000 crores in loans to his collapsed Kingfisher Airlines. At the time, the government cancelled Mallya's passport and asked the UK government to deport him to India.

Analysis

CBI had charged Mallya with cheating and conspiracy in a 1,000-page charge sheet against him for defaulting on a loan taken from the IDBI bank in 2009. The CBI probe found that 250 crores of this - given to buy aircraft parts - was diverted abroad. India’s Debt Recovery Tribunal gave the consortium of banks permission to seize his property in a bid to recoup the loans.

In April 2017, Mallya was arrested by the Metropolitan Police on behalf of the Indian authorities. He appeared at Westminster Magistrates' Court and posted bailed on security of £650,000. As his passport has been cancelled by Indian authorities, he is UK on an "indefinite leave to remain" visa or on permanent residence.

In October 2017, Mallya was arrested for the second time in the UK. However, once again he has been granted bail after appearing at Westminster Magistrates' Court for a hearing. CBI as well as Enforcement Directorate have announced their intent to file chargesheets against Mallya and present it as evidence in the Westminster Magistrates' Court. For his part, the tycoon has denied any wrong doing. Upon India’s request, he provided a large box which had four reports as a response.

Assessment

Our assessment is that Mallya might have fewer options as the law would close on him in the near future. While he has continued to abscond summons by courts and investigators in India, he has maintained a high public profile in the UK. However, his extradition hearing is set to begin in December of this year and it is then when his fate will be decided. The Indian authorities have signaled that they are willing to push to ensure he is successfully extradited back to India.  

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