Arrest warrant issued for Mallya

Indian authorities have issued an arrest warrant against Vijay Mallya, the former head of United Spirits, just days after freezing his passport.

(Photo: Wiki)

The warrant was issued on the “third strike and out” practice of the Indian Enforcement Directorate (ED) when the colourful former tycoon failed to appear at the third time of asking at a Mumbai court to answer allegations of misuse of funds loaned to his Kingfisher Airlines by a state-owned bank, IDBI.

This is one of 17 Indian banks seeking to recover some $13 billion from Mallya. Last month they rejected his proposed scheme to repay $600 million.

It is alleged that Mallya used part of the $134m loan from IDBI to buy properties overseas. The airline, which was never profitable, collapsed into bankruptcy in 2012 with debts approaching £1bn.

Mallya has consistently denied impropriety and his private holding company, UB Group, said that the full loan, including up to $65m alleged to have been diverted to Mallya’s personal use, had been “used for legitimate business purposes only”.

The statement said that the arrest warrant was “erroneous and unjustified”.

Mallya, who is thought to be in Britain, has been ordered by India’s supreme court to disclose all his assets to the authorities.

Court sources are quoted as saying that the warrant issued against Mallya is “non-bailable”.

Mallya rejects claims that he is a fugitive from justice, having left India only days after agreeing a £75m payoff from Diageo to resign as USL chairman.

“Once a media witch hunt starts, it escalates into a raging fire where truth and facts are burnt to ashes,” he tweeted.

Meanwhile, he has been given until Friday to convince the ED why his diplomatic passport should not be rescinded permanently.

The ED is also consulting legal experts about the prospects of issuing an Interpol “Red Corner” notice against Mallya. It is also considering beginning extradition proceedings against him in the UK.