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PMLA court: Banks can take over Mallya properties worth Rs 5,600cr

MUMBAI: In two separate orders, the special Prevention of Money Laundering Act (PMLA) court has allowed the plea of the SBI-led consortium of banks to restore to it properties collectively worth Rs 5,600 crore of absconding businessman Vijay Mallya. Through an order on May 24, the court restored assets worth around Rs 4,233 crore. Tuesday’s order related to assets worth Rs 1,411 crore. In both orders, the court held prima facie Mallya and his companies were involved in falsification of accounts and funds misappropriation.
The assets include under-construction properties in Kingfisher Tower, Vittal Mallya Road, Bengaluru, spread over 2.45 lakh sq ft and worth over Rs 564 crore, multiple floors of a tower at UB City, Bengaluru valued at Rs 713 crore (as per the ready reckoner rate in 2016) and a land parcel along with a farm house at Mandwa, Alibaug, worth around Rs 25 crore. In addition, bank deposits and pledged shares are also to be restored. While some of the assets are in Mallya’s name, others are held through his companies.
In 2019, the SBI-led consortium of 12 banks had submitted the application seeking “restoration” of the properties attached by the Enforcement Directorate (ED) under the provisions of the PMLA. It was alleged that the banks that had disbursed loans to Mallya and his companies had suffered losses of over Rs 6,200 crore due to their criminal actions.
Mallya’s defence had opposed the plea stating he had given only a personal guarantee and that could not connect him to the alleged money laundering. Refuting the arguments, the court said that Mallya had full control and command over Kingfisher Airlines Ltd. It said that despite having no offshore operations, its accounts indicated expenditure of fuel for ‘aircraft operating offshore’.
The court further said between 2009 and 2011, though the company’s financial condition was poor, it transferred money received through loans to Mallya’s Force India. “The transferred amount was shown as payments for operating expenses in relation to flight operations,” the court said.
The court said the losses were not imaginary. “The accused Dr Vijay Mallya himself placed a proposal for replacement of dues. Had there been no loss to the banks, why is Dr Vijay Mallya ready to repay the loss,” the court said. It also pointed out that the properties were insufficient to meet the losses suffered by banks. In the orders, the court also remarked that it was surprising to note that Mallya’s legal team was demanding information from the ED about when he would come to India. “Ironically, the absconding accused himself is asking the court to get confirmation from the investigating agencies as to when they would secure the custody of the accused. Dr Vijay Mallya should come with clean hands,” special judge Jayendra C Jagdale said.
The court also said that restoration can take place on the banks executing a bond, undertaking to produce the properties before it as and when required.

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