'Tycoon' Mallya forced to live on £5,000 a week as assets frozen
15 December 2017
Twelve Indian banks and a financial institution have successfully filed an application in the high court to freeze nearly Rs10,000 cr of the UK assets of businessman Vijay Mallya. Documents filed at the Queen's Bench Division of the High Court of Justice, state that the freeze order went into force on 24 November this year, according to The Times of India.
Mallya is asking for the order to be set aside, but meanwhile he has to get by on £5,000 a week. He has requested the court that the allowance while his assets are frozen be raised to £20,000.
Mallya, who is currently undergoing an extradition trial in a UK court over an alleged Rs9,000 crore fraud and money laundering charges, will face next year a parallel litigation brought by 13 Indian banks to freeze nearly $1.5 billion of his assets, according to PTI.
According to court documents, the claim brought by the Indian banks against the 61-year-old former liquor baron will come up for a hearing in April next year.
"The First Respondent's (Mallya) application to set aside the Freezing Injunction is to be set down for hearing on the first available date after 11 April 2018 with a time estimate of 2 days," states the court document.
The litigation in the Queen's Bench Division of the commercial court in England's High Court of Justice lists the State Bank of India, 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. Pvt Ltd as the applicants.
Mallya's now defunct Kingfisher Airlines defaulted on loans and interest to a consortium of 17 Indian banks in 2010. In 2013, the airlines lost its licence and in 2016 he left for the UK, where he is now fighting extradition.
The extradition trial will resume on Thursday at Westminster Magistrates' Court. Prison condition expert Dr Alan Mitchell will give evidence for the defence. According to The Times of India, India's Central Bureau of Investigation sources expressed optimism that based on the hearing so far, they could get Mallya extradited.
Quoting an order of the Debt Recovery Tribunal, Bengaluru, that Mallya owed Rs 6,203cr, the banks moved the Commercial Court and sought enforcement of the Indian judgment in the UK under the Foreign Judgments (Reciprocal Enforcement) Act 1933 and the Reciprocal Enforcement of Judgments (India) Order 1958. They obtained an order restraining Mallya from moving his assets out of the UK up to a limit of Rs9,853cr and to prevent him from diminishing assets of the same value in or out of the UK.
Mallya filed an application on 7 December to set aside the freezing order. Mallya has until 22 December to give a statement confirming his worldwide assets. A two-day hearing will take place in April.
The mortgage for Mallya's Rs100 crore Tewin mansion, which he bought off F1 champion Lewis Hamilton's father Anthony, is in the name of Ladywalk LLP. Orange India Holdings Sarl, based in Luxembourg, owns and operates the Force India Formula One Team and is a subsidiary of United Breweries Ltd. Rose Capital Ventures Ltd is registered in offshore tax haven the British Virgin Islands.
Mallya and concerns Ladywalk LLP, Rose Capital Ventures Ltd and Orange India Holdings are listed as respondents, according to PTI.
The claim dated 23 November relates to a judgment of the Debt Recovery Tribunal (DRT) in Karnataka dated 19 January this year, which concluded that Mallya was "liable" to the banks in the sum of Rs62,033,503,879.42 plus interest and as at 22 November, that judgment sum is "still unsatisfied as to Rs98,530,512,249.42".
The UK court had upheld the Indian court's injunction last week and given Mallya's lawyers more time to respond due to the ongoing extradition trial at Westminster Magistrates' Court, which is now expected to conclude on 20 December.
A ruling in the extradition case is expected a few weeks later, by mid-January.
Meanwhile, Mallya remains on a £650,000-bail bond since his arrest on an extradition warrant by Scotland Yard in April this year.
Since 4 December, he has been in court over five days of hearings to establish if he can be forced to return to India to face charges of fraud and money laundering involving his now-defunct Kingfisher Airlines' default of bank loans worth the widely touted figure of Rs9,000 crore, though Mallya claims this amount is greatly exaggerated (See: Mallya may face biased SC, trial by media in India: expert witness).