Vijay Mallya's defence team on Tuesday argued in a London court that there was no evidence to support the case of fraud against him by the government of India, and he should not be extradited to face fraud charges related to the collapse of his Kingfisher Airlines.
The Indian government has requested Mallya's extradition from Britain accusing him of fraudulently palming off the airline's losses onto banks by taking out loans he had no intention of repaying.
The 61-year-old was in the dock at Westminster Magistrates' Court for his defence, headed by barrister Clare Montgomery.
Montgomery opened her arguments by stating that there was no evidence to support the case of fraud.
On the opening day of the trial, the Crown Prosecution Service (CPS), arguing on behalf of the Indian government, had asserted that the embattled liquor baron had a "case of fraud" to answer. (See: Mallya never intended to repay Kingfisher loans, UK court told)
Mallya has had business interests ranging from liquor to aviation. He is also the co-owner of Formula One motor racing team Force India.
The case against him centres on a series of loans Kingfisher obtained from Indian banks, especially state-owned lender IDBI. The banks want to recover a total of about $1.4 billion (Rs9,000 crore) that they say the defunct airline owes.
Montgomery claimed that the evidence presented by the CPS, on the direction of the Indian government, to prove a case of fraud amounted to "zero", and was a "critical failure on the part of the government of India".
"There is no evidence," she told the court. "Economically and legally it is impossible to palm off losses onto banks by borrowing to pass on the cost of failure."
She said there were competing narratives, fraud versus business failure, and that no reasonable jury would be able to reach a safe conclusion that there had been a deliberate intent to defraud.
She added that the Indian government's case revealed a "shocking" lack of appreciation of how companies function and of basic realities such as the effects of incorporation and the rights of shareholders.
Mallya, the focus of intense media interest in India, arrived wearing a dark suit and yellow tie and was mobbed by cameramen as he walked into the building.
Inside the courtroom he spoke only to confirm his name and age, before sitting quietly in the glass-walled dock as Montgomery spoke.
She said the government's allegation that Mallya had deliberately misled banks by overstating Kingfisher's projected profits was "a false premise".
That was because airlines were subject to many unpredictable factors beyond their control, such as fuel cost fluctuations and the global economic climate, so to make entirely accurate projections several years in advance was unrealistic.
Montgomery also rejected the allegation that senior managers at state-owned lender IDBI were involved in Mallya's fraudulent plan.
"That is one of a number of allegations that prosecuting authorities have made without a shred of evidence," she said.
Montgomery also rejected the allegation that Mallya had improperly spent the money borrowed from the banks, saying there was no evidence of disbursements on anything other than the benefit of Kingfisher.
The extradition hearing is expected to last two weeks. The judge, England's Chief Magistrate Emma Arbuthnot, will have to decide whether there is a prima facie case against Mallya and whether the alleged crimes would be offences in Britain as well as India.