Four Months After SBI Failed To Seek Restraining Order Against Mallya, UK Red-flagged His Rs 170 Crore Transfer
It was the alert from the British authorities that finally prompted Mallya’s Indian lender banks to take action.
Four months after State Bank of India (SBI) failed to seek a restraining order against Mallya in the Supreme Court, British authorities in London red-flagged Mallya when he made a suspicious transfer.
Mallya had transferred 17.86-million pound (Rs 170 crore) to a bank in Switzerland, which brought him under the radar of British authorities, reported The Indian Express
On June 28, 2017, the UK Financial Intelligence Unit (UKFIU) alerted Indian investigating agencies about the transfer. The transaction was then converted into an SAR (Suspicious Activity Report) by the UKFIU.
UKFIU marked the report to the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) in New Delhi. Soon after, both agencies met in London where the UK authorities advised India to restrain Mallya from disposing off his assets.
It was advised that Mallya’s lenders should attempt to extend enforcement of the Debt Recovery Certificate (DRC) by a tribunal in Bengaluru to the UK, in February 2017.
It was only after this alert that Mallya’s 13 lending banks took action. They banks formed a consortium and moved towards freezing of Mallya’s UK assets. However, the Rs 170 crore bank transfer could not be blocked because of the time taken by Indian banks.
In November 2017, UK slapped Mallya with a Worldwide Freezing Order (WFO), following which, he lost control over his UK assets valued at 1.14 billion pounds.
The UK court’s order for seizing Mallya’s assets observed that in February 2016, Mallya had immediately “dissipated” the $40-million settlement he received from Diageo into bank accounts of Trusts which had his children as beneficiaries.
Mallya’s assets which were barred from “dissipation” were three large properties; his shares in the Sahara Force India Formula One team, two yachts, the Tipu Sultan sword and funds in bank accounts.