Vijay Mallya arrives at Westminster Magistrates Court to face an extradition request by India, in London, Britain, December 10, 2018. REUTERS/Peter Nicholls
Vijay Mallya arrives at Westminster magistrates court in London on Monday © Reuters

Vijay Mallya, the Indian tycoon behind the collapsed Kingfisher Airlines, can be extradited from the UK to face fraud and money laundering allegations in his home country, a court in London has ruled.

A judge at Westminster magistrates’ court on Monday decided there was no reason to block the extradition after finding Mr Mallya had a case to answer on criminal charges linked to Kingfisher Airlines’ collapse in 2012.

While Mr Mallya has the right to appeal, the decision caps a two-year attempt by India’s government to secure the extradition of the flamboyant businessman as part of its declared war on the “crony capitalism” of its predecessors.

The allegations against Mr Mallya relate to the diversion of funds from bank loans, including from state-owned IDBI Bank.

The 62-year-old, who also built India’s biggest alcoholic drinks business and was known as the “King of Good Times” for his high-rolling lifestyle, has fought against the attempts to extradite him. He claims he is the victim of a high-profile “witch-hunt” led by Narendra Modi, India’s prime minister.

Mr Mallya is a reviled figure in India, where is he considered emblematic of Indian businessmen living in luxury even as their companies fail to repay billions of dollars in debts to the stricken banking system.

Arun Jaitley, India’s finance minister, on Monday cheered the court verdict, tweeting, “Great Day for India. No one who cheats India will go scot free.”

Kingfisher Airlines, where Mr Mallya was chairman and chief executive, collapsed in 2012 leaving about $1.1bn in unpaid debts to banks that were mostly state-owned.

Mr Mallya has repeatedly insisted that the airline’s demise was a legitimate business failure triggered by unfavourable Indian aviation industry policies and unprecedented high oil prices, almost $112 per barrel at the time.

The Indian government alleges that Mr Mallya’s handling of his airline went beyond bad management into criminal wrongdoing including fraud, fund diversion and other misdeeds. It claims that Mr Mallya was the central figure in a “dishonest plot” to obtain large loans from IDBI for Kingfisher Airlines in 2009.

In her ruling, judge Emma Arbuthnot, chief magistrate at the Westminster court, said the allegations were that Mr Mallya and other Kingfisher executives conspired with figures at IDBI Bank to sanction and disburse loans they had no intention of repaying.

Ms Arbuthnot said of IDBI that there had been a “catalogue of failures of the bank at different levels” and that if proper background checks had been carried out then the loans to Kingfisher would not have been granted.

These failures, she said in the ruling, were either deliberate or “it is a case of a bank who were in the thrall of this glamorous, flashy, famous, bejewelled, body guarded, ostensibly billionaire playboy who charmed and cajoled these bankers into losing their common sense and persuading them to put their own rules and regulations to one side”.

Mr Mallya came to the UK in 2016 after his frustrated creditors sought a restraining order to prevent him from leaving India in the hopes of getting him to pay up. His flight prompted public outrage in India after which New Delhi launched legal proceedings against him including cancelling his Indian passport.

Despite Monday’s decision, Mr Mallya is unlikely to be extradited from London for some time and may seek to overturn the decision to the High Court. Although he attended Monday’s hearing he left the courtroom without speaking to the media.

Mr Mallya’s lawyers had argued that his extradition to India should be blocked as “no credible evidence” was put forward and said that Kingfisher had given “full and complete and accurate information” to IDBI before the loans were made.

For the judge to make her decision, it was not necessary to establish whether Mr Mallya was innocent or guilty of the allegations, but whether there was enough prima facie evidence of a criminal case for him to be extradited. The case will now be passed to the home secretary for approval.

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