Vijay Mallya extradition case edges towards ruling

Chief Magistrate Emma Arbuthnot is set to deliver her judgment on India’s efforts to extradite businessman Vijay Mallya to India on Monday. It will follow a trial that took place over the course of nine months, ending in September, following Mr. Mallya’s arrest in April 2017, on an extradition warrant.

India has been seeking the businessman’s extradition on charges of fraud and money laundering amounting to ₹9,000 crore. He has been on bail since his arrest.

The case focuses on loans disbursed by the IDBI Bank, with the prosecution arguing that Mr. Mallya never had the intention of paying back the loans, used misrepresentations (including on brand valuation) to obtain them, used the funds in ways that were never intended by the terms on which they were disbursed, and attempted to squirrel away parts of it.

“His company was in intensive care, the market was in intensive care, it was only heading in one direction, as it went down it was going to sustain huge losses and the defendant had a choice: either take those losses yourself and impinge on your own lifestyle or you try and palm them off onto a bank,” Mark Summers, the Crown Prosecution Service barrister told the court in December 2017 when the case kicked off.

The defence has rejected these contentions, insisting that the loans had been taken out as Mr. Mallya and Kingfisher Airlines attempted to rescue the business, amid unprecedentedly difficult conditions for the aviation sector, particularly because of high oil prices and sluggish demand in the wake of the global economic crisis.

It was a case of “business failure” rather than fraud, Mr. Mallya’s lead barrister Clare Montgomery told the court at the start of the case. They have also challenged the contention that it was used in ways never agreed to and have maintained that the guarantees provided – including through the valuation of the company – were nothing other than genuine.

Alongside challenging the main government case they — through expert witnesses — have sought to portray the case as politically motivated, and have raised concerns about jail conditions in India and in Arthur Road Jail in Mumbai, where Mr. Mallya would be detained before and (if convicted) after any trial there.

The defence had also challenged the admissibility of certain prosecution evidence – an attempt that failed in all cases save for email conversations covered by legal professional privilege.

The hearings have continued well beyond the original period envisaged, as the judge sought clarifications on jail conditions and other issues, including detailed notes on the conspiracy charges facing Mr. Mallya in India, as well as notional charges.

“It’s like a jigsaw puzzle,” remarked Arbuthnot during one of the hearings earlier this year.

While India’s attempt to extradite alleged bookie Sanjeev Chawla was initially rejected (it has successfully appealed and the case is to be reheard) because of concerns around jail conditions, in the final hearing – when final oral submissions took place – Arbuthnot indicated that, having received assurances and further details from India relating to jail conditions, that it was the prima facie case that would matter most to her.

Even if the judgment goes against Mr. Mallya, he is unlikely to be extradited to India any time soon, given the appeal options that would be open to him (and to India if it lost).

Mr. Mallya has attended the hearings, often making public statements inside and outside the court house. Among the most controversial came on the day of the final hearing in September when he let drop that he had met Finance Minister Arun Jaitley in Parliament before he left the country in March 2016 and told him he would be leaving for London.

Mr. Mallya has occasionally taken to Twitter to make public his defence arguments and point to the settlement offer he had made before the Karnataka High Court, relating to the loans from a consortium of 13 public sector banks. “I have offered to repay 100% of the principal amount to them. Please take it,” he tweeted last week.