Vijay Mallya faces Jail if He Returns to India

Indian tycoon Vijay Mallya is the first person to be charged under the Fugitive Economic Offenders Ordinance. He faces jail time in India if convicted.

"I don't want to comment on anything. It's ridiculous, I have not heard of anything of the sort."

The flamboyant tycoon, Vijay Mallya, in an act of desperation, has made contact with the Enforcement Directorate (ED) and the Indian government to return to India.

The ED had moved a Prevention of Money Laundering Act (PMLA) via the courts to help initiate proceedings against him.

A source from the ED stated: “The fugitive businessman has apparently approached the ED, but nothing has been guaranteed to him. Even if he comes back it doesn’t mean he won’t be prosecuted.”

He is being charged with money laundering following a complaint received from the State Bank of India, acting on behalf of a consortium of banks.

Mallya supposedly caused a loss of Rs 6,027 crore by not keeping up repayments of various loans that were taken out by Mallya firms between the period of 2005-10.

Speaking to a news outlet at the British Formula One Grand Prix, the troubled businessman was fervent in what he would hand over. Namely British assets registered in his own name.

Questions were constantly being asked by the media about whether  Vijay Mallya was going to send the banks home empty-handed.

Most of his assets are in Britain and they are not in his name. Luxury purchases of Mallya’s include lavish homes, sports cars and an array of extravagant buys highlighting his wealth, none of which were in his name.

Assets that were considered a no-go zone for authorities were a country residence and a house in London, which both belonged to his children and mother.

“I have given the UK court on affidavit a statement of my UK assets. Which, pursuant to the freezing order, they are entitled to take and hand over to the banks,” he told Reuters.

“There’s a few cars, a few items of jewellery and I said ‘OK, fine. You don’t have to bother to come to my house to seize them. I’ll physically hand them over. Tell me the time, date and place.”

A consortium of 13 Indian banks was granted permission by the UK High Court to facilitate an order for enforcement officers to Mallya’s estate. The order was to be executed by the enforcement officers at Vijay’s home on the periphery of London.

The enforcement officers were granted control of his possessions. The UK High Court order allowed entry into homes in Hertfordshire, Ladywalk and Bramble Lodge in Tewin, Welwyn, where Mallya is currently reported to have been residing.

The embattled liquor magnate really went out of his way to demonstrate the homes weren’t his by declaring he had no interest in the properties.

Banks have illustrated that his three homes are linked to a family trust, which are interconnected through a web of companies set up in tax havens outside of the UK and India. All of his assets and properties combined are estimated to be worth Rs 65.4 crore.

His property outside of London in Hertfordshire is estimated to be worth millions of pounds. The address 18/19 Cornwall Terrace is apparently owned by Rose Capital Ventures (RCV), who also happen to be named as defendants in the HC case.

This company is based out in the British Virgin Islands and is owned by another company called Gladco Properties Inc, which is owned by Continental Administrations Services Limited, located in the tax haven of St Kitts and Nevis.

If you thought the web did not get tangled any further, you’d be wrong. Continental Administration Services Limited (CASL) is a mere trustee of a Mallya trust.

There are a number of those. Some suspect that the number of trusts and companies set up by Vijay Mallya is pure subterfuge. Detractors feel he has created them for two purposes.

One to avoid having to pay the massive amount of tax, as many businessmen do when they have companies based in Britain. Similar economic strategies have been applied by major corporations such as Google and Amazon.

By setting tax-free havens in countries like St Kitts and Nevis, Vijay Mallya would have to pay little to nothing. And secondly to help avoid any asset seizures, which can’t legally be done if they’re not in his name.

Through the Prevention of Money Laundering Act (PMLA), Vijay Mallya has had all his properties confiscated and has been declared a fugitive economic offender to boot. The tycoon’s reputation has taken a severe mauling with his name being dragged through the tabloid press in India.

The entrepreneur is the first person to be charged under the Fugitive Economic Offenders Ordinance. With the authorities having no plans to drop charges against him, Vijay is determined to clear his name.

So baffled is he by the charges, when pressed for a quote he replied: “I don’t want to comment on anything. It’s ridiculous, I have not heard of anything of the sort.”

Mallya’s protestations have fallen on deaf ears. He aims to place himself in a position to be exonerated of the charges levelled against him.

The liquor baron had already issued a statement prior to approaching the Indian government and the ED. In his statement, he conveyed that both he and his company United Breweries Holding Limited (UBHL), had sought permission from the court to sell assets.

The businessman has asked the court that it grants him leeway to raise monies via asset sales. This, in turn, will be used to settle debts that are hurting him due to the mounting interest.

Assets valuing a mammoth Rs 13,900 crore are required by the embattled businessman to help meet debt obligations. This request was made by the 62-year-old to the courts, with the addition of the sales being supervised by judicial bodies to help meet his debt obligations.

The Modi government is starting to flex its muscles and will crack down hard on any economic offenders who seek to escape Indian jurisdiction as some believe Vijay Mallya has.

The ordinance, however, allows any defendant the right to file a case and be heard. Mallya’s extradition hearing is set to continue.

Haider is an aspiring editor with a passion for current affairs and sports. He's also an avid Liverpool fan and a foodie! His motto is "be easy to love, hard to break and impossible to forget."

Image courtesy of AP

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