The Beleagured Playboy

On Monday, Chief Magistrate Emma Arbuthnot of the Westminster Magistrates’ Court ordered the extradition of Vijay Mallya to India for his alleged bank fraud of about Rs 9,000 crore from a consortium of 13 banks. In ordering Mallya’s extradition to India, the magistrate referred to the substantial “misrepresentations” in the flamboyant billionaire’s characterization of his financial dealings. This comes as a major boost to India’s efforts to bring back the fugitive for the alleged bank fraud amounting to an estimated Rs 9,000 crore. Delivering the verdict, Judge Emma Arbuthnot said that there was a prima facie case against Mallya and that his human rights would not be infringed if he was extradited to India. Both in respect of her verdict and her description of Vijay Mallya, Judge Arbuthnot was the epitome of thoroughness. Describing the 62-year-old Vijay Mallya, she said the bankers had been “charmed” by a “glamorous, flashy, famous, bejewelled, bodyguarded, ostensibly billionaire playboy” into losing their common sense.” She also said that Mallya had misrepresented the state of his company (Kingfisher Airline) and was not above using “round robin” methods to use the funds acquired for purposes other than what had been specified to the banks. She said that loans had been obtained on the basis of false documents, and that banks had ostensibly been fooled by the billionaire’s flamboyant personality. She also said that there was “no sign of a false case being mounted against him”. The matter will now be referred to the Home Secretary of State Sajid Javid who must also approve it and order his extradition. Mallya has the option of appealing to a higher court, but the judgement of Arbuthnot was so well argued that some lawyers felt that the chances of a successful appeal are limited.

Considering that quite a few “glamorous” criminals have succeeded in evading legal punishment due to the criminal’s political connections in India, it is certainly pertinent to question the efficacy of a system that permits criminals to escape punishment by holing up in some foreign country for extended spells. But since it is the political top brass in India that makes this possible, it is also pertinent to ask how long they imagine this derailment of the law can continue. It is our considered view that such major aberrations of the law can take place only with the connivance of those in government who make it possible for law-breakers to cut corners and then flee to some other country. All said and done, it is useful to bear in mind that people like Vijay Mallya succeed in looting banks of huge sums of public money because they have the help of people who are capable of advancing huge loans even to someone with very poor credentials. It is idle to imagine that such help comes free without any kind of quid pro quo. Some of the key conclusions of the judgement of the Westminster Magistrates’ Court in the Vijay Mallya case are interesting. They are: (a) that Mallya is not being prosecuted in India for his political opinions; (b) that the court found a prima-facie case of conspiracy to defraud, involving executives of Mallya’s Kingfisher Airlines and IDBI officials; (c) that Mallya had misrepresented how loans received from banks would be used. It appeared that the banks were deliberately misled about the fortunes of Kingfisher Airlines and (d) that there is clear evidence of dispersal and misapplication of the loan funds and the judge found a prima-facie case that Mallya was in a conspiracy to launder money. All said and done, we have a case where several chief executives of banks in India are guilty of advancing huge sums of public money to a criminal whose credentials were never questioned even when a consortium of banks advanced him Rs 9,000 crore in loans. There are very good reasons for the government to frame charges against the executive heads of these banks. This is a task that calls for far greater urgency even than proceeding against Vijay Mallya. This is not to suggest that proceedings against Vijay Mallya should be dropped. But it is important to get our priorities right. Mallya could not have had access to Rs 9,000 crore of public money if bankers who should have known better had not given it all to him on a platter.