CBI issues new warrant against Vijay Mallya in loan default case

MUMBAI: In more troubles for fugitive economic offences (FEO) Vijay Mallya, a CBI court here took cognisance of the chargesheet filed against Mallya and others in a cheating and corruption case registered by SBI, the lender bank, part of the consortium that granted loans to Mallya's beleaguered, Kingfisher Airlines (KAL). The court has also issued a non-bailable warrant against Mallya.

Finding merit in the CBI's case and relying on the evidence submitted by the agency, the court held that it was prima facie evident that there were "false rosy projections about the profitability equity infusion", by KAL. The loans, however, were diverted for the purposes other than those avowed thereby causing a wrongful loss of Rs 141.91 crore on account of default on loans and an additional wrongful loss of Rs 38.30 crore on account of conversion of loans to CCPS /CRPS shares.

"...The oral and documentary evidence also prima facie shows that the accused bank officers abused their official positions as public servants. They had shown undue favour to Vijay Mallya and KAL, processed the loan proposals of M/s. KAL in undue haste and sanctioned the same overlooking the precarious financial condition of the company. Vijay Mallya and M/s. UBHL, deliberately and with intent to deceive, guaranteed the loans availed by M/s. KAL from IOB, induced the said bank to sanction and disburse the loans in question, having availed the facilities, they deliberately and dishonestly defaulted on their obligations under such guarantees and alienated their respective assets in violation of the guarantee provisions, with the object to cause impediments in the banks' recovery efforts and to evade their own liabilities under the said guarantees," the order reviewed by ET states.

The court also held that the oral and documentary evidence also prima facie shows that the accused bank officers abused their official positions as public servants.

"...They had showed undue favour to Mr Vijay Mallya and KAL, processed the loan proposals of M/s KAL in undue haste and sanctioned the same overlooking the precarious financial condition of the company. Mr Vijay Mallya and M/s UBHL, deliberately and with intent to deceive, guaranteed the loans availed by M/s KAL from IOB, induced the said bank to sanction and disburse the loans in question, having availed the facilities, they deliberately and dishonestly defaulted on their obligations under such guarantees and alienated their respective assets in violation of the guarantee provisions, with the object to cause impediments in the banks' recovery efforts and to evade their own liabilities under the said guarantees," the court observed.