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Vijay Mallya had no intention of repaying the loans taken by Kingfisher Airlines: ED investigation

Mallya had remitted money taken from Banks in the name of lease rental for aircraft

The Enforcement Directorate has concluded in its investigations that the fugitive businessman Vijay Mallya had no intention to repay the loans taken by his company Kingfisher Airlines (KAL). An investigation conducted by the ED into the finances of KAL revealed that unsecured debt was provided to the loss-making KAL through various dummy companies through a circuitous route which added to the non-viability of the company.

An amount of Rs 3,516 crore was reportedly channelised to KAL by United Breweries Holdings (UBHL) after which the restructured principal loan amount reached Rs 5,575.72 crore. Unsecured loans worth over crores were also arranged by UBHL from entities like Wave Group, SICCL (a Sahara Group Company). According to officials, a criminal conspiracy was devised to obtain and restructure loan for KAL and Mallya and the UBHL had no intention to repay the loans.

It was found on tracking the money trail of loans during the investigation that a major portion of loans given to KAL was remitted outside the country and has been falsely shown as expenses on account of operational expenses or lease rentals. The loans given by the SBI, Axis Bank and Punjab National Bank worth Rs 3,200 crore to KAL were remitted outside the country in the name of aircraft rental leasing and maintenance, spare parts etc. But the investigation reveals that there were huge variations in the payments, especially towards lease rentals even for the same kind of aircraft for the same period of time.

Also due to the failure on the part of KAL to produce supporting documents for lease rentals despite repeated reminders of the ED, the agency has concluded that the bank loans obtained were embezzled abroad in the guise of lease rentals in a calculated and pre-planned manner.

Earlier ED had also alleged that Mallya had over-invoiced aircraft lease. The Airlines had taken a loan of ₹900 crore from IDBI bank for paying lease rentals, and the money was remitted to foreign countries. It is alleged that Mallya had deliberately selected companies that charged higher amounts compared to other companies.

Kingfisher Airlines had taken two aircraft from two Mauritius based companies, and directors of the companies were former Kingfisher employees. The lease paid to these companies were significantly higher than what is charged by other companies for the same aircraft, which shows that the lease rental payment route was being used to remit fund abroad illegally by Mallya.

The chargesheet filed by ED had said that KAL was the entity fully controlled by Vijay Mallya, which was used as a vehicle for money laundering.

Ayodhra Ram Mandir special coverage by OpIndia

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OpIndia Staffhttps://www.opindia.com
Staff reporter at OpIndia

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