March,8,2016: The SBI and other banks on Tuesday moved the Supreme Court with a plea to prevent Vijay Mallya from leaving the country.
The SBI leads a consortium of 17 lenders to the grounded Kingfisher Airlines, which has defaulted on loans worth over Rs 7,000 crore.
The top court agreed to give urgent hearing to the banks’ plea and has listed it for Wednesday after attorney general said it would be difficult to catch Mallya, an NRI, if he leaves country.
“List it for hearing tomorrow,” a bench comprising Chief Justice T S Thakur and Justice U U Lalit said, when attorney general Mukul Rohatgi, appearing for PSU banks, mentioned the matter for urgent hearing.
Mallya, who recently clinched an exit deal worth Rs 515 crore with Diageo, had indicated that he was likely to relocate to the UK.
On Monday, the Enforcement Directorate (ED) registered a case of money laundering against Mallya and later in the day a Debt Recovery Tribunal (DRT) said the liquor baron can’t access the Rs 515 crore he got from the recent sale of his spirits business to Diageo, until a loan default case with the State Bank of India is settled.
In what was called a ‘sweetheart deal’, Mallya sold his business to Diageo last month. The SBI had asked for the DRT’s intervention in seeking the lenders’ first right to the Rs 515 crore payout from Diageo to Mallya. The DRT took up the request on a priority bsis.
State Bank of India had approached the Debt Recovery Tribunal (DRT) seeking arrest of Vijay Mallya in a bid to recover loans to Kingfisher Airlines, which was promoted by the liquor baron.
SBI also wanted his passport impounded and a complete disclosure of his personal assets.
The move by ED, under the Prevention of Money Laundering Act (PMLA), comes after the CBI registered a suo motu FIR against Kingfisher Airlines in July 2015.
The company owes at least Rs 7,000 crore to 17 banks; some of them such as the State Bank of India and Punjab National bank have already named Mallya and his company as a “willful defaulter”.
The CBI had registered the FIR against Mallya. A Raghunathan, chief financial officer of Kingfisher Airlines, and unknown officials of IDBI Bank. It is alleged that the loans were sanctioned in violation of norms regarding credit limits.
The SBI has the highest exposure of Rs 1,600 crore to the beleaguered Kingfisher Airlines. Other banks that have exposure to the airline include Punjab National Bank and IDBI Bank (Rs.800 crore each), Bank of India (Rs. 650 crore), Bank of Baroda (Rs. 550 crore), Central Bank of India (Rs. 410 crore).
UCO Bank has to recover Rs. 320 crore, Corporation Bank (Rs 310 crore), State Bank of Mysore (Rs 150 crore), Indian Overseas Bank (Rs. 140 crore), Federal Bank (Rs. 90 crore), Punjab & Sind Bank (Rs. 60 crore) and Axis Bank (Rs. 50 crore)