Court allows liquidation of Vijay Mallya's assets

MUMBAI: A special purpose court dealing with money laundering offences has allowed banks that lent money to Vijay Mallya to utilise the embattled liquor baron’s seized assets, which could fetch the lenders about Rs 11,000 crore – more than what they had advanced.

However, the Prevention of Money Laundering Act (PMLA) court in Mumbai also said the ruling has been stayed till January 18, until which all parties affected by the order could appeal to the Bombay High Court.

The seized assets mainly comprise financial securities, such as shares.


In February last year, the Enforcement Directorate (ED) had told the special PMLA court that it had no objection to liquidation of confiscated assets by a consortium of banks, led by the State Bank of India (SBI).

The lenders are seeking to recover more than Rs 6,200 crore from the fugitive businessman.

However, ED had asked the court to seek a guarantee from the lenders that they would return the money to the court or the ED “in the unlikely event” that the accused wins the criminal trial.

Mallya, 63, who left the country in March 2016, and has been living in the UK, is accused in India of conspiracy to defraud banks and of money laundering. He remains on bail pending the UK High Court appeal hearing in the extradition proceedings brought by India.

Late last year, he was declared a fugitive economic offender (FEO) by the PMLA court under the Fugitive Economic Offenders Act, the first person to be censored under the law.

After the amendment of the PMLA Act, property rights may be restored even during trial in certain cases. The lenders want to liquidate the assets to claim Rs 6,203.35 crore, along with interest of 11.5% per annum payable since 2013.