UK Court Rejects Mallya Plea To Halt Bankruptcy Process

By Poonam Joshi

The UK High Court today refused an appeal by the fugitive businessman Vijay Mallya to dismiss the bankruptcy petition brought by a consortium of banks which are attempting to recover the debts owed by Mallya’s now-defunct Kingfisher Airlines in lieu of the loans granted to the airline.

In a major setback for the 65-year-old Mallya, Justice Birss of the Insolvency and Companies division of the UK High Court upheld an earlier ruling that the bankruptcy proceedings be halted in just the latest appeal by Mallya against the proceedings.

The consortium of banks is led by the State Bank of India (SBI) and includes Bank of Baroda, Corporation Bank, Federal Bank Ltd, Jammu and Kashmir Bank, State Bank of Mysore, United Bank of India and other financial institutions that lent money to Kingfisher Airlines before the carrier’s collapse in 2012.

Mallya has repeatedly offered to settle his dues and debts through United Breweries Holdings, the previous holding company of Kingfisher Airlines of which he was a major shareholder. However, the banks contend that the assets of the holding company are not in Mallya’s control and therefore he is not in a position to use the assets in any settlement offer.

Mallya’s legal team has said that the banks are “secured creditors” and thus should not bring bankruptcy proceedings.

The latest ruling comes just two days after the same court denied Mallya access by a UK court to a significant chunk of his cash held by the UK court funds office.

Judge Sebastian Prentis refused to release the funds, saying that Mallya had failed to provide the necessary information to permit the release of the funds.

This means that Mallya will have to apply to the court every time he needs to cover legal or other expenses.

Mallya was ordered extradited to India in 2018 to face charges of defrauding a consortium of Indian banks out of more than 1 billion euros relating to the collapse of Kingfisher.

That extradition order was upheld on appeal all the way to the UK High Court in April 2020.

However, the UK Home Secretary Priti Patel has held off on signing the extradition order due to a legal technical issue currently being dealt with by the UK Home Office.

Mallya is also thought to have sought political asylum in the UK.

The tycoon had also sought the court’s approval to use part of the 2.9 million euros in proceeds from the sale of a mansion on the island of Ile St Marguerite, a Mediterranean island off the southern coast of the plush French Riviera, within sight of Cannes.

The proceeds from the sale and other assets are held within the Court Funds Office (CFO) while Mallya battles bankruptcy proceedings.

Justice Prentis had also questioned as to what had happened to other assets held by Mallya, including jewellery and a string of luxury cars – including valuable vintage Ferraris. Marshall claimed that all his assets were under “control orders” and Mallya was down to just over 250,000 euros held in a bank account.

Tony Beswetherick, the barrister representing the Indian banks, said releasing the funds would give Mallya the opportunity to disperse the funds that were meant to be paid towards the debt owed to the banks.

Another hearing on the bankruptcy proceedings will take place at the High Court on January 22. (ANI)