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Vijay Mallya And The Sanctuary Of Oligarchs & Criminals

How was Vijay Mallya allowed to leave India? How does a business baron who owes banks thousands of crores of rupees get to leave the country as a defaulter in spite of court proceedings under way, a consortium of 17 banks asking for his passport to be impounded, and former Kingfisher employees demanding their salaries pending for months? Now with rise of Indian Oligarchs increasingly finding asylum in Britain, is it a far-fetched scenario for India as well like Russia, when these Oligarchs would be used for inciting revolution in India or even orchestrating elections?

Liquor baron Vijay Mallya’s exit from India rocked Parliament on Thursday with the Opposition and government trading charges over his departure. Interestingly, the attendance record on the Rajya Sabha website shows that Mallya was present in the House on March 1, a day before he left the country.

Shockingly, Mallya left India on a Jet Airways flight with nearly a dozen baggage items on March 2, which is also the day when the public sector banks, to whom he owed an estimated Rs 9,091 crore in loans moved a special debt recovery court seeking an arrest warrant against him.

Mallya took Jet Airways’ Delhi-London flight 9W 122 last Wednesday (March 2) at 1:30pm, said a top government official.

Accompanied by a woman, Mallya flew first class to London.

“He checked in seven big pieces of luggage. The meet and assist service provided to all first class passengers was accorded to Mallya and his companion,” said a source. Locals in Hertfordshire, north of London, where Mallya has a luxury residence, confirmed spotting him.

“There was no bar on Mallya travelling abroad on the day he left India. Banks moved the SC to ensure he remains in India only after he left India. The timing is curious and points to someone tipping off Mallya about the banks’ impending move because of which he chose to leave India and he did not travel light,” said a former confidante, now among hundreds of unpaid Kingfisher employees.

Besides the State Bank of India, other banks which have moved the court are the Axis Bank, the Bank of Baroda, the Corporation Bank, the Federal Bank, the IDBI Bank, the Indian Overseas Bank, the Jammu and Kashmir Bank, the Punjab and Sind Bank, the Punjab National Bank, the State Bank of Mysore, the UCO Bank and the United Bank of India.

However, Mallya is only the tip of the iceberg. Making Mallya a poster boy of bank loan default is not good enough. During a debate on NDTV names of several other influential Indian promoters in the infrastructure sectors who were potentially defaulters came to light. Of the top ten corporate groups that owe banks 7.5 lakh crore rupees, nearly half are close to default status. Most members from these groups are politically influential and have friends in all leading political parties.

Recently, the Supreme Court expressed dismay at 1,14,000 crore rupees of corporate loans being written off by banks since 2013-14, perhaps the largest write-off in 48 months. More write-offs are in the pipeline as banks have taken over a dozen bankrupt companies (with mostly useless assets) in the faint hope of reviving them. All this is happening even as big promoters continue to fly their private planes and holiday on their luxury yachts.

It is a major fraud and has been continuing on a regular basis since a long time as explained in our previous article Should State Owned Indian Banks Be Privatised?. Recently, US based bond rating company Moody’s Investor Service cautioned the Indian government that if it did not boost the capital levels of PSUs by revising its capital infusion plan for the public sector banks in the upcoming budget, the banks will see negative ratings.

Rating 11 state owned banks in India Moody has estimated an external capital requirement at the tune of Rs 1.45 lakh crore for the four financial years, ending March 31, 2019.

Following the directive the Indian government has announced a series of major banking reforms, including lowering its stake in state-owned banks to a staggering 51 per cent.

Under these banking reforms PSB mergers are a top priority, inspite of nationwide protests from the bank employees union of each of these banks. For these reforms the proponents of privatisation raise the issue of productivity in the PSBs. However what they fail to mention is that these are the same banks whose fraudulent policies of the sub-prime housing mortgage collapsed the entire US economy. Now these same banks are lining-up to buy Indian PSBs. The question is where is all the money coming from in these bankrupt banks in the first place?

If the problem the banks are in in the first place is because of the bad-debt write offs which is a major fraud, what should be the appropriate solution? To ensure appropriate regulatory mechanism to prevent such frauds from occurring and bringing the fraudsters to book or by simply privatising the banks? Is privatisation the only one-stop solution to all of the problems the country is facing, be it the railways, energy, education or any other sector?

Some legal experts are already drawing a parallel between Mallya and former IPL chief Lalit Modi. Both are currently being investigated for alleged money laundering by Indian investigative authorities. It is possible that Mallya, like Modi, may refuse to come back to India.

It is not the first time a person fleeing local law in foreign countries has taken shelter in London. Since decades, high-profile foreign offenders with considerable wealth have found refuge and a safe place to park their assets and enjoy a peaceful life, away from the laws of their home countries snapping at their heels – including many from Russia.

Immediately after the collapse of the Soviet Union large-scale privatization of state-owned assets was implemented. From Glasnost and Perestroika (Liberalisation and Privatisation) emerged the Oligarchs – who amassed vast wealth by acquiring state assets very cheaply (or for free) during the privatization process.

After coming to power Vladimir Putin set about on a massive purging of these oligarchs from Russia, the power struggle that continues to this day. The most famous case is that of Mikhail Khodorkovsky. In 2003, Khodorkovsky was believed to be the wealthiest man in Russia (with a fortune estimated to be worth $15 billion) who accumulated considerable wealth through obtaining control of a series of Siberian oil fields unified under the name Yukos, one of the major companies to emerge from the privatization of state assets during the 1990s. Khodorkovsky was later backed up by Henry Kissinger, George Soros and Rothschilds as a candidate to run for a Presidential election against Putin as well as an attempted revolution.

Related: Charlie Hebdo, The House Of Rothschild & India’s Independence

Not just Khodorkovsky but a significant number of these oligarchs found a safe haven in UK and Israel. These oligarch community buying homes in upscale sections of London has led to journalists calling the city “Londongrad” or “Moscow on Thames”.

UK has been traditionally the largest sanctuary to not just money launderers and fraudsters but foreign terrorists and extremists as well. Everybody, who is somebody in the world of terrorism, has found a rear base in the UK.

There are as many as 131 pending pleas for extradition of wanted criminals from Britain by India alone.

Below are just some of the cases of individuals wanted in India and living in Britain:

  1. Vijay Mallya (financial offences)
  2. Lalit Modi (financial offences)
  3. Ravi Shankaran (accused in the Indian Navy war room leak case)
  4. Tiger Hanif (wanted in connection with two bomb attacks in Gujarat in 1993)
  5. Nadeem Saifi (music director accused and acquitted in the Gulshan Kumar murder)
  6. Raymond Varley (accused in child abuse cases in Goa)
  7. Lord Sudhir Choudhrie (one of India’s most notorious arms-dealers and Italian consortium’s middleman in Finmeccanica helicopter scandal)
  8. Several individuals related to the Khalistan movement
  9. Several individuals related to the LTTE
  10. Several individuals related to ISIS

Even MQM leader Altaf Hussein resides in London, under the protection of the British government, which has refused Pakistani government requests for his extradition to face trial for murder.

India and Britain signed an extradition treaty in December 1993, but Indian circles in London do not remember a single individual wanted by India being extradited.

As per the extradition process UK has divided countries on the basis of priority for extradition.

The highest priority (Category 1) is given to countries of the European Union. Most of the remaining countries of the world fall in Category 2. Now here’s where it gets interesting.

Category 2 is further divided into 2- A and B. A has all the rich and powerful allies of the UK (USA, Russia, Israel, Australia etc.).

Category B has all of the remaining countries. India falls under this category 2B.

A senior official speaking to Hindustan Times said, “Unless Mallya himself returns to India, there is virtually no chance of India being able to secure his extradition through normal channels.”

To keep things in perspective UK is the third largest source of foreign direct investment in India. And India is the third largest source of FDI (in terms of the number of projects) in the UK, after the US and France. Recently more than $13.7 billion worth of commercial deals were signed between India and UK.

Recently, Russian Oligarch Khodorkovsky said Open Russia would provide logistical backing to 230 candidates running from various opposition parties or on independent tickets in September from the headquarters of his Open Russia foundation in London. Now with rise of Indian Oligarchs increasingly finding asylum in Britain is it a farfetched scenario for India as well when these Oligarchs would be used for inciting revolution in India or even orchestrating elections?

Shelley Kasli for GreatGameIndia Magazine

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  • Mithun

    Remember Warren Anderson of Union Carbide?The GOI helped him escape and then made a show of trying to get him back to face “trial” in India.What a joke!.That man went on to retire and live out his remaining life in the comforts of Long Island.Now it is history repeating all over again with Mallya.

    • GreatGameIndia

      Yes Ofcourse. Even we didn’t extradite David Headley when he was already under obligation by the Chicago Court to testify in any international proceedings. There was no reason to pardon him.

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