LONDON (Reuters) – India asked a London court on Monday to extradite magnate Vijay Mallya to face fraud charges for reducing the losses of his bankrupt Kingfisher Airlines to a state bank.
Mallya denies any wrongdoing, and a court document shows that his lawyers planned to argue that the case against him he was politically motivated and aimed at quelling public anger in India over the accumulation of bad debts by state lenders.
Mallya, 61, has had business interests ranging from aviation to liquor. He is also the co-owner of the Formula One Force India racing team.
With long, bearded hair, Mallya arrived at the Magistrates Court in Westminster in a blue striped suit and dark glbades with a gold frame.
Upon his arrival, a large crowd of Indian reporters harbaded him, and later when the building was evacuated briefly due to a fire alarm and he had to leave.
The case against Mallya focuses on a series of Kingfisher loans obtained from Indian banks, and in particular from state-owned IDBI. Indian banks want to recover a total of about $ 1.4 billion that the Indian authorities say Kingfisher owes.
Mark Summers, a British lawyer acting for India, told the court at the start of a two-week extradition hearing that he was entitled to conclude that he never intended to return the money loaned by Kingfisher to the IDBI in 2009.
"His company was in intensive care … it was headed in one direction," Summers said. "As I went down, I was going to suffer great losses."
"THE COST OF FAILURE"
Summers said that Mallya faced a choice: take those losses with himself and his luxurious lifestyle, or corner them. .
"The cost of noncompliance could be badumed honestly by the defendant or could be pbaded on to banks, particularly to a state bank," he said.
Summers said the airline had offered the safety of its brand, a large additional injection of capital and a commitment to start paying off capital debt in 2011 when you predict it will be profitable.
But Summers said that these were deliberately misleading or exaggerated. The loans had been withdrawn under "false pretenses" that were "backed by worthless securities," he told the court and then did not spend on how the bank had been told.
Part was used to compensate the money owed to other banks, to pay a corporate plane used by Mallya, his family and friends, and cash for Mallya himself, Summers said.
Some were also spent on releasing credit for Kingfisher at another bank. "Ultimately, that money ended up in the defendant's motorsport team," Summers told the court.
Despite giving IDBI personal guarantees for the loans, the lawyer said Mallya had been "hiding money to keep him out of the bank," including $ 40 million he received as part of an agreement with Diageo Plc (DGE) .L).
Mallya's defense team had to answer orally later in the hearing.
In a written document prepared before the hearing and seen by Reuters, his lawyers argued that the request for extradition should be rejected due to lack of evidence, the "abusive origins" of the case, the impossibility of a fair trial in India and the conditions of detention are incompatible with British human rights laws.
"It is a case that has been driven in India not by a probative investigation, but by a populist and mistaken feeling that the size of the losses involved in the collapse of Kingfisher Airlines Ltd (KFA) should be indicative of some criminality somewhere, "said the document.
"That sentiment has been stoked in India by politicians of all kinds, all of whom will only benefit from the demonization of the former senior executives of KFA, the bankers who lent it, and, crucially, the man who is now he presents as an embodiment of all the ills of capitalism in contemporary India, Dr. Mallya. "
The judge will have to decide whether there is a prima facie case against Mallya and whether the alleged crimes would be crimes in both Britain and India.
The judge, the chief magistrate of England, Emma Arbuthnot, will have to decide whether there is a prima facie case against Mallya and whether the alleged crimes would be crimes in both Britain and India.
The hearing should conclude next week.
Written by Estelle Shirbon; Edition by Andrew Heavens