The attachment was done as part of investigations into the alleged Rs.900-crore IDBI Bank loan default case.
“During investigations, we found that some of the properties were being disposed of by the accused. Therefore, to ensure that further proceedings are not disturbed, properties equivalent to the proceeds of crime of Rs.807 crore, having current market value of Rs.1,411 crore, have been provisionally attached,” said a senior ED official.
The U.K.-based Diageo, which now controls United Spirits, had in February paid $40 million to Mr. Mallya outside India, as part of a severance package after he agreed to step down from the post of United Spirits chairman.
The provisionally attached assets include bank balance of Rs.34 crore, two flats in Bengaluru and Mumbai measuring 2,291 and 1,300 square feet respectively, a 4.5-acre industrial plot in Chennai, coffee plantation land in Coorg spread across 28.75 acre, besides the residential and commercial constructed areas in UB City and Kingfisher Tower in Bengaluru, spread over 8.4 lakh square feet.
After the Central Bureau of Investigation registered a case on July 29 last year against Mr. Mallya, his company Kingfisher Airlines and unknown IDBI Bank officials, the ED launched the money laundering probe on January 25.
Investigations revealed that the loan amounting to Rs.864 crore was sanctioned to the airlines against the collateral security of the ‘Kingfisher’ brand, corporate guarantee of UBHL and personal guarantee of Mr. Mallya.
“Of the total amount, Rs.807 crore remained unpaid. The corporate loan was sanctioned and disbursed despite weak financials, negative net-worth and low credit rating of the company. The company being a new client did not satisfy the norms stipulated in the corporate loan policy of the bank,” said the official.
No due diligence
According to the Directorate, Kingfisher Airlines and its officials conspired to get the loan sanctioned without due diligence and the airline diverted the funds.
“The loan was sanctioned in extraordinary haste without independent verification of the quality and value of the said security. Subsequently, to avoid payment of dues, corporate guarantee and personal guarantee rendered by United Breweries and Mr. Mallya were challenged by them in Bombay High Court on the grounds of coercion and undue pressure,” said the official.
The ED found that the airline had allegedly defaulted in repayment of loan, causing wrongful loss to IDBI Bank. Funds to the tune of Rs.423 crore were remitted outside the country on the pretext of aircraft lease rentals and other expenditures.
However, no supporting documents have been furnished so far to substantiate the claims, leading to the conclusion that part of the loan amount was siphoned off abroad in a calculated and pre-designed manner, the agency alleged.
The agency also said Mr. Mallya, who is currently in the U.K., held several movable and immovable assets in India and abroad through his various companies and his office personnel.While a non-bailable warrant is pending against him, a request has been sent to the Interpol to issue a ‘Red Notice’ against him. Efforts are now under way to initiate extradition proceedings against Mr. Mallya.Earlier this week, the agency approached court seeking that Mr. Mallya be declared a Proclaimed Offender under the Criminal Procedure Code, helping strengthen the case for his extradition.