INDIA. Mumbai: In a major setback to absconding liquor baron Vijay Mallya and a big win for Indian banks, the London High Court on Monday, declared the fugitive Indian businessman bankrupt.
The Chief Insolvencies and Companies Court (ICC) Judge Michael Briggs said in his ruling during a virtual hearing of the Chancery Division of the High Court in the UK, that “ I adjudicate Dr. Mallya bankrupt,”. The judge handed down his judgment in favour of the banks to declare that there is no public policy that prevents a waiver of security rights, as argued by Mallya’s lawyers, official SBI sources here said.
The fugitive businessman’s barrister, Philip Marshall, sought a stay as well as an adjournment of the order while legal challenges remain ongoing in the Indian courts. However, the requests were turned down by the judge who concluded that there was “insufficient evidence” that the debt will be paid back to the petitioners in full within a reasonable period.
The Indian banks, represented by the Bristol-based law firm TLT LLP and barrister Marcia Shekerdemian, argued for the bankruptcy order to be granted in favour of the Indian banks. “The only thing to bring this mess to an end is Mallya coming back to India to face trial and quite bizarrely his own lawyers are asking when he is coming back”, said Mercia Shekerdemian, said.
The petitioners comprised a consortium of 13 banks including SBI, Bank of Baroda, Corporation Bank Federal Bank Ltd, IDBI Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Punjab & Sind Bank, Punjab National Bank, State Bank of Mysore, UCO Bank, United Bank of India and JM Financial Asset Reconstruction Co. Private Limited. The petitioners also included an additional creditor who had been pursuing a bankruptcy order in the UK about a judgment debt that stands at more than GBP 1 billion.
Responding to judgement Mallya twitted “ ED attach my assets worth 14K crores at behest of Govt Banks against debt of 6.2K crores. They restore assets to Banks who recover 9K crores in cash and retain security over 5K crores more. Banks ask Court to make me Bankrupt as they may have to return money to the ED. Incredible”.
Monday’s ruling will help the consortium of Indian banks, to recover debt from loans given to Mallya’s now-defunct Kingfisher Airlines by seizing his India assets. The debt in question comprises principal and interest, plus compound interest at a rate of 11.5 percent per annum from June 25, 2013 onwards. Mallya has made applications in India to contest the compound interest charge.
Last month, the Enforcement Directorate (ED) transferred attached assets worth Rs 9173 crore to the public sector banks who suffered losses due to the frauds committed by Vijay Mallya, Nirav Modi, and Mehul Choksi. An ED had said that Mallya, Modi, and Choksi have defrauded public sector banks by siphoning off the funds through their companies, which resulted in a total loss of Rs 22,586 crore to the banks.
Similarly last month the SBI led consortium sold Mallya’s shares worth Rs 5,825 crore in the United Breweries (UB) group to Heineken company and recovered around 70% of their Rs 9,900 crore defrauded loan money. On an earlier occasion, the bank had sold Mallya’s share in (UB) and United Spirits Ltd (USL) worth Rs 1,357 crore. Mallya allegedly owned most of these shares in Benami name. Now Mallya’s properties and securities worth Rs 5600 crore await auctioning by the Punjab National Bank.
Meanwhile, the 65-year-old businessman remains on bail in the UK while a “confidential” legal matter, believed to be related to an asylum application, is resolved in connection with Mallya’s extradition proceedings. He is fighting three cases in Indian courts which include an application for “settlement” filed by him in the Supreme Court, the 11.5 percent compound interest levied by the SBI led consortium and A special court’s decision to declare him as an economic offender under the Fugitive Economic Offenders Act (FEOA) 2018.