“UBHL and myself have filed an application before the Hon’ble Karnataka High Court on June 22, 2018, setting out available assets of approximately Rs. 13,900 crores. We have requested the Courts permission to allow us to sell these assets under judicial supervision and repay creditors, including the Public Sector Banks such amounts as may be directed and determined by the Court.”
This is what Vijay Mallya has said in a letter made public recently, according to this report in the Times of India.
Mallya left India for the United Kingdom in 2016, around the time since when a consortium of Indian banks have been trying to recover loans of up to Rs 9,000 crore to firms headed by Mallya. The question is, what made Mallya come up with the above plan after two years? Here a few informed guesses (taking up from this tweet by Ashutosh Muglikar)
1. The Insolvency and Bankruptcy Code (IBC) passed
The IBC came into effect in mid 2017. The most important feature of the Code, as this PRS summary points out, is that it creates a time-bound insolvency process for individuals and companies. Recently, reports of the first insolvencies completed have also started to come in pointing to the fact that it is working.
2. The Economic Offenders Ordinance and the Benami Transactions (Prohibitions) Act
Both of these are now legal realities. In fact, as this report says, Vijay Mallya was the first person to be declared an economic offender, and his properties had been attached by the Enforcement Directorate (ED) in 2016. This means that not only can the state attach assets of Vijay Mallya, as it has, Mallya can’t even save them through benami means.
3. Passport revoked
Mallya’s passport was revoked on the request of the ED back in 2016 thus severely limiting his avenues to plan a possible escape to.
4. Extradition case heading to a conclusion
Mallya is currently fighting an extradition case in the UK in which the final hearing is to be on 31 July. Recently, in another case, the UK High Court had ordered Mallya to compensate 13 Indian banks for the legal proceedings which they are pursuing against him.
Each of the above four initiatives are more complex than as described above. However, what is common to all is that they are driven, directly or indirectly, by the Indian government. In other words, like it or not, Narendra Modi is making Vijay Mallya pay his dues.