CBI Expands Probe Against Vijay Mallya In Loan Default Case

India’s main investigating body, the Central Bureau of Investigation (CBI) is expanding its investigation into the banks loan default case of Rs 7,000 crore involving Vijay Mallya, the erstwhile chairman of UB group. The CBI recently announced that it is now planning to examine 6 lakh financial transactions carried out by Mallya in the past few years.

More than 60 percent of these transactions are said to involve Mallya shifting money abroad from the loans provided to him by public sector banks for his domestic airlines. According to Enforcement Directorate, the Indian agency that deals with financial crimes, Mallya has been diverting large portions of the Rs.900-crore loan that was issued to the Kingfisher Airlines by IDBI.

The Times of India

Sources have said that the CBI has leads to four nations that were used as tax havens for this financial siphoning. The CBI has also been mandated to identify if such siphoning was being done by Mallya from loans received by him from other state-run banks as well.

The CBI has already registered a case against Vijay Mallya, Kingfisher Airlines and the company’s CFO A. Raghunathan along with unnamed IDBI Bank officials who have supposed to have violated regular banking practices in order to sanction the Rs 900-crore loan to the airline against credit norms. The total value of loans defaulted by Kingfisher Airlines which closed operations in 2012 amounts to over Rs. 7,000 crore.

One of the key focus areas of CBI’s investigation is to establish how Mallya was able to receive substantial loans from 17 banks despite the airline being in a dire financial situation. CBI sources say that the banks and their officials are being investigated in this regard.

The CBI has also questioned why the banks did not file a complaint against Mallya and Kingfisher Airlines for the defaulted loan payments earlier despite being approached by CBI. IDBI and Union Bank of India are both said to have refused to file a complaint in 2012 and 2014 despite encouragement from the CBI to do so.

The CBI is also examining whether Kingfisher Airlines shifted profits from selling its Airbus planes instead of repaying its creditors. According to the investigating body, Mallya had evaded the issue during questioning last year by claiming that the funds were used to pay foreign vendors and airports for rendering services like parking of planes and their maintenance.

There have been questions raised on the follow up done by the CBI as well. The agency is reported to have cancelled a look-out notice against Mallya which enabled him to leave the country earlier this month. Mallya took advantage of this favor and fled the country and is now reported to be living in one of his country side mansions in the United Kingdom.

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