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HomeFT SelectVijay Mallya hits back at India’s $1.3bn debt claim

Vijay Mallya hits back at India’s $1.3bn debt claim

Vijay Mallya has denied that he fled India leaving behind $1.3bn of unpaid loans, after Indian authorities this week charged the billionaire industrialist with criminal conspiracy, dishonesty and corruption in an effort to secure his extradition from the UK.

In a series of tweets late on Thursday night, Mr Mallya said that there was “no final judicial determination on what Kingfisher Airlines owes to banks and what I may owe in my personal capacity after trial”.

“Yet it is reported that I have fled or run away owing money to banks that I never even borrowed in the first place.”

Mr Mallya, who was known in his heyday as India’s “king of good times” is at the heart of a public controversy in India about the lavish lifestyles enjoyed by wealthy businesspeople.

The tycoon made his fortune as the owner of India’s biggest spirits company and the maker of the popular Kingfisher beer, but fell out of favour after his Kingfisher Airlines collapsed, leaving behind a mountain of unpaid debt.

Indian authorities have been investigating Mr Mallya since 2015 over allegations that he diverted part of a $134m loan awarded by the state-owned IDBI Bank to Kingfisher into foreign assets.

India’s Central Bureau of Investigation on Tuesday filed charges against Mr Mallya, his now defunct Kingfisher Airlines, and nine other executives and bankers, alleging that he dishonestly induced the delivery of property and illegally obtained pecuniary advantage — charges that can carry a sentence of up to seven years in prison.

The accusations have reignited public anger at Mr Mallya, who last year left for the UK where he owns an office, apartment and country home.

On Wednesday, the Securities and Exchange Board of India, India’s market regulator, barred Mr Mallya and six others from the stock market. It said that he allegedly diverted funds out of United Spirits, the liquor company he ran until last year.

Mr Mallya hit out at SEBI over its claims: “Allegations of fund diversion out of United Spirits are baseless. United Spirits accounts were approved by top auditors, an eminent Board of Directors and shareholders,” he tweeted.

Mr Mallya denies that he fled to the UK and said he was vindicated last year when the British government refused to deport him even though New Delhi revoked his passport and issued a warrant for his arrest.

Lawyers said the Indian government will now be able to make a proper extradition request because it has outlined formal charges.

The actions against Mr Mallya come ahead of state assembly elections and are likely to be seen as an attempt to lessen public criticism of the ruling Bharatiya Janata party for not prosecuting the billionaire.

The BJP and prime minister Narendra Modi have made tackling corruption a key plank of their policy platform.

Via FT