Vijay Mallya’s $40m transfer to his family members resulted in a $25 fine



The Supreme Court (SC) on Monday imposed a fine of 2,000 rupees ($25) and a four-month prison sentence on runaway businessman Vijay Mallya. Additionally, the former liquor baron was asked to deposit $40 million with 8% interest within a month or else his properties would be seized to collect the amount.

The court found Mallya in contempt after being told he had transferred $40 million to his children in the United States. In 2016, the Karnataka High Court prohibited Mallya from transferring money to a third party without settling existing dues. These loans were owed by his defunct Kingfisher Airlines to a consortium of various public sector banks led by the State Bank of India.

Court documents show that Mallya had received the amount of $40 million in his Swiss bank account on February 25, 2016 from Diageo Plc, a company controlled by him. The next day, he transferred an amount of 13 million dollars each to his son Siddharth and his daughters Tanya and Leanna. The money was transferred from Mallya’s Swiss bank accounts to three separate trusts whose sole beneficiaries were each of her three children. The remaining amount of nearly $1 million was transferred on February 29 through the same channels and split equally between Siddharth, Leanna and Tanya Mallya. All of her children are US citizens.

Read also : SC sentences Vijay Mallya to four months in prison and asks him to deposit $40 million

This transfer of money, according to the SBI’s request, amounted to a disregard of the instructions of the High Court and amounted to contempt. The case was challenged in the nation’s highest court which issued judgment in 2017 but reserved sentence in the case. Mukul Rohtagi, the Attorney General of India at the time, had represented the banking consortium in this case.

Under SC rules, anyone charged with contempt must appear in person in court. With law enforcement hot on her trail, Mallya, who had traveled to London, filed a motion to have the contempt notice withdrawn instead. The court had considered Mallya’s refusal to appear before him in person as additional grounds while finding him in contempt. The Home Ministry has been asked to produce Mallya in court, which the Indian authorities have so far failed to do. He was given a ‘last chance’ by the SC in February to appear before him in person, but Mallya did not.

Mallya’s conviction by the Supreme Court on Monday was also based on “disobedience to the orders made by this court by not disclosing full details of the assets as ordered”. The Karnataka High Court had asked Mallya to provide a full list of all his assets, bank accounts including properties in India and offshore destinations. However, the court accepted lawyer Mukul Rohatgi’s claim that Mallya had provided opaque details of his assets, including the beneficial owners of various entities. He was accused of having “intentionally concealed” these facts.

The consortium of lenders, through Rohatgi, also told the court that despite orders to provide the information, the location of the assets that were eventually disclosed by Mallya were so vague that no one but him could identify where they were.

Mallya, through his lawyer, had dismissed those allegations and argued that the details he had submitted were aimed at reaching a “meaningful settlement” with the banks. The court found no basis for his counter-arguments.

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