ED summons Mallya as tycoon denies 'fleeing' India

World Friday 11/March/2016 17:40 PM
By: Times News Service
ED summons Mallya as tycoon denies 'fleeing' India

Mumbai/New Delhi: Vijay Mallya was on Friday summoned to appear before the Enforcement Directorate (ED) on March 18 even as the beleaguered businessman asserted he is not an absconder amid an escalating political row over how he was able to go abroad unhindered with National Democratic Allinace (NDA) ally Shiv Sena also targeting the government.
As the Bharatiya Janata Party (BJP) and Congress traded charges, the controversial departure of Mallya, 60, in the middle of a massive loan default probe rocked Rajya Sabha for the second day with Congress leader and Leader of Opposition Ghulam Nabi Azad asking the government why did the Central Bureau of Investigation (CBI) amend its 'lookout' notice against the liquor baron within a month last year.
Taking forward its money laundering probe in the alleged default in payment of Rs900 crore dues to IDBI bank by the now defunct Kingfisher airlines, the ED issued summons to Mallya for appearance in Mumbai on a day when A Raghunathan, a former Chief Financial Officer (CFO) of the carrier, appeared before at investigators at its Mumbai office.
"The summons have been issued to Mallya under provisions of the Prevention of Money Laundering Act in connection with the IDBI case," official sources said.
The sources said Mallya has also been asked to furnish documents related to his personal finances.
"We had summoned Raghunathan and he appeared before us for questioning this morning.
"His questioning is important to throw light on various financial transactions, as many of them are in his personal domain," an ED official said.
With his departure from India on March 2 kicking up a row, Mallya, who is facing legal proceedings for alleged loan defaults by his group to the tune of over Rs9,000 crore, said he will comply with the law of the land.
"I am an international businessman. I travel to and from India frequently. I did not flee from India and neither am I an absconder. Rubbish," Mallya, who is believed to be in the United Kingdom, tweeted from an undisclosed location.
He further said: "As an Indian MP I fully respect and will comply with the law of the land. Our judicial system is sound and respected. But no trial by media."
Hitting out at the government over Mallya's departure, Shiv Sena said those who raised hue and cry over Lalit Modi "fleeing" the country should now answer how did the liquor baron leave. The BJP had targeted the UPA government when the former IPL boss, who was facing an ED probe on various charges including money laundering, left India in 2010.
"Since he has given services to many, some allowed him to take loans, while others let the money drown. Then there are some who let him leave the country. People who were making a hue and cry over Lalit Modi leaving the country should now answer how did he (Mallya) do so," the Sena said.
Keeping up the offensive on the Mallya issue, Congress' chief spokesman Randeep Surjewala alleged that the businessman was "made to run away" with active abetment of government agencies.
Defending the government, BJP National Secretary Shrikant Sharma accused Congress of "misleading" the country with its "baseless" allegations and asked it to come clean on bailout package given to him during the UPA rule.
Meanwhile, the Bombay High Court on Friday deferred till March 28 hearing on two applications filed by Service Tax Department for recovery of over Rs32 crore from Kingfisher Airlines and its chief Vijay Mallya.
One application challenged a magistrate's order granting anticipatory bail to Mallya and others in a case filed by the Department against them for recovery of Rs32.68 crore Service Tax collected by the airline from passengers during 2010-11, but not deposited in the government treasury.
The other application sought a direction to Mallya and other directors to appear before the trial court on April 6 for the next hearing, and also in the high court in this case.
Justice C V Bhadang on Friday asked the Service Tax Department to serve copies of the two applications to the airline, Mallya and others before March 28.
Meanwhile, according to a news agency report, two people familiar with Mallya's travel arrangements said Mallya flew first class to London on Jet Airways Flight 9W-122 the next day.
Indian TV reporters said they had traced Mallya to the Hertfordshire village of Tewin, north of London, where he is known to locals. The businessman's luxury home, called "Ladywalk", cost £11.5 million ($16.4 million) when bought in July 2015, property records show.
Security officials said that Mallya was the subject of a "lookout notice" - an official circular that triggers an alert if the target seeks to leave India but does not provide a legal basis to prevent departure.
No formal legal warrant was issued against him, even as creditors sought to step up efforts to recover the $1.4 billion owed by Kingfisher Airlines, which stopped flying in October 2012.
"What can we do? It was the banks' responsibility to file a criminal case against him," said a senior home ministry official who declined to be identified because he was not authorised to discuss the case publicly. "We had no legal basis to stop him."
Commentators say the high-profile case is symptomatic of weak management at India's public sector banks - Mallya's lead creditor is State Bank of India. While a bill to modernise India's bankruptcy laws is now before parliament, the outdated legislation that is currently in force leads debt litigation to drag on for years.
Banks ramped up their campaign to retrieve funds after Mallya quit as chairman of spirits maker United Spirits , a unit of Diageo Plc, last month. As part of that settlement, Diageo will pay Mallya $75 million over five years.