Dubious honour for Vijay Mallya
Mallya has become the first businessmen to be declared a Fugitive Economic Offender
- Published 5.01.19, 11:56 PM
- Updated 5.01.19, 11:56 PM
- 2 mins read
In a fresh setback to absconding liquor baron Vijay Mallya, a Mumbai court on Saturday declared him a fugitive economic offender (FEO).
Mallya has, thus, become the first businessmen to be declared an FEO under the Fugitive Economic Offenders Act that came into force in August last year.
The Enforcement Directorate (ED) had last year moved the Prevention of Money Laundering Act Court for this purpose. The agency had requested the court that Mallya, now in the UK, be declared a fugitive and his properties be confiscated and brought under the control of the Union government as provided under the Act.
Special judge M.S. Azmi declared Mallya an FEO under Section 12 of the Act after hearing extensive arguments from Mallya’s lawyer and the ED counsel.
Mallya, accused of defaulting on loan repayments and money laundering, had left India in March 2016. He owes around Rs 9,000 crore to a consortium of 13 banks. While his assets can now be attached, the next hearing will be held on February 5 when the court will decide which assets to attach.
Under the new law, a fugitive economic offender is any individual against whom a warrant for arrest is issued for involvement in select economic offences involving amounts of Rs 100 crore or more and has left India to avoid criminal prosecution.
A designated special court can declare a person a fugitive economic offender and allow the confiscation of his property outside India as well.
According to the act, all the rights and title in the confiscated property will, from the date of the confiscation order, vest with the central government and free from all encumbrances.
The Enforcement Directorate, which had moved the application last year, had reportedly sought confiscation of Mallya’s assets worth Rs 12,500 crore, both movable and immovable.
Both the Houses of Parliament had passed the Fugitive Economic Offenders Bill, 2018, in July last year.
In August, President Ram Nath Kovind had given his assent to the law.
Piyush Goyal, who was then in charge of the finance ministry, had justified the financial limit of Rs 100 crore in the law, saying it was done to not clog the court and catch the big offenders.
The Special Court, will, on passing a confiscation order, appoint an administrator to manage and deal with the property. Only an insolvency professional under the Insolvency and Bankruptcy Code will be eligible to be appointed as an administrator under the Act.
In December, the Westminster Magistrates’ Court in London had ordered the extradition of Mallya to India.