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Liquor baron Vijay Mallya’s extradition trial begins; prosecution claims fraud

After a complicated legal wrangle, the extradition trial of Vijay Mallya, wanted in India on charges of INR9,000 crore fraud and money laundering, began yesterday at a UK court in London, with the prosecution asserting that the embattled liquor baron had a “case of fraud” to answer.

Vijay Mallya in London.
Vijay Mallya in London. Photo courtesy: Wikimedia

The trial began with the Crown Prosecution Service (CPS), arguing on behalf of the Indian government, presenting its opening arguments in the case which focussed on loans totalling around INR2,000 crore sought by the erstwhile Kingfisher Airlines from a consortium of Indian banks.

The CPS admitted that there may have been “irregularities” in the internal processes of the banks sanctioning some of those loans but that would be a question to be dealt with at a later stage in India.

“The focus of our case will be on his (Mallya’s) conduct and how he misled the bank and misused the proceeds,” said CPS barrister Mark Summers. He then went on to lay out a detailed chronology of events, with specific focus on a loan sought by Kingfisher Airlines from IDBI bank in November 2009.

The trial, however, was briefly halted as the courtroom had to be evacuated due to a fire alarm. The 61-year-old tycoon and others waited outside the Westminster magistrates court during the fire drill.

Westminster Magistrates' Court.
Westminster Magistrates' Court. Photo courtesy: ministryofjusticeuk

The CPS noted that in all the loans sought, “loss-making” Kingfisher Airlines had relied on nearly the same set of security pledges, which included the UB Group’s reputation, Kingfisher’s own “brand value”, a promised infusion of equity funds and a projected return to profit by the airline by February 2011.

“The airline had claimed that it had put proactive measures in place to improve performance,” the CPS noted.

However, it was also a time when according to an industry analysis, the state of the airline industry was described as “grim” and as being in “intensive care”.

“It was not a scenario in which a state bank would have entertained such loan requests,” the CPS added.

The CPS team highlighted "excellent cooperation with the Indian authorities".

Mallya’s barrister, Clare Montgomery, told the judge that she had hoped to set out the defence’s opening arguments on the first day as well.

His defence team tried to get the judge to allow him to sit outside the dock near his defence team to access some of the complicated paperwork being relied upon, but the judge denied that request saying all defendants are expected to sit in the dock. However, the judge has directed that a table be provided to Mallya for easier access to his paperwork.

Earlier, Mallya looked relaxed when he entered the court to stand trial on charges of fraud and money laundering related to his erstwhile Kingfisher Airlines owing several Indian banks around INR9,000 crore.

“These (allegations against me) are false, fabricated and baseless,” Mallya told reporters outside the court ahead of the hearing.

Mallya is accused of laundering money to the F1 racing team Force India, whose latest car, the VJM10 is named after him.
Mallya is accused of fraud involving the F1 racing team Force India, whose latest car, the VJM10 is named after him. Photo courtesy: Twitter/@Sahara Force India

A four-member CBI and Enforcement Directorate (ED) team from India had also arrived at the court ahead of the trial, one of whom nodded when asked he they were “confident” about their case.

Mallya, who has been out on bail since Scotland Yard executed an extradition warrant in April this year, will be in the dock for the duration of the trial scheduled to end on December 14. If the judge rules in favour of extradition at the end of the trial, UK home secretary Amber Rudd must order Mallya's extradition within two months. However, the case can go through a series of court appeals before the actual extradition order can be issued.

Tushaar Kuthiala
Tushaar Kuthiala – Associate Editor

Tushaar has extensive experience as a journalist and in founding two start-up newspapers. He has developed editorial models for both copy and content, and has written several articles, news reports on a wide range of topics. He is a graduate of St. Stephen’s College and earned a post-graduate diploma in TV Journalism from the Asian College of Journalism (ACJ), Chennai. He has worked as a special correspondent based in New Delhi with Daily World, an international media organisation.