A court in the United Kingdom on Monday declared fugitive businessman Vijay Mallya as bankrupt, News18 reported. The court also declined permission for an appeal or a stay on the bankruptcy order.
The order will allow appointment of a bankruptcy trustee to investigate Mallya’s worldwide assets and recover the money he owes a consortium of banks led by the State Bank of India in a fraud case involving the now defunct Kingfisher Airlines. The consortium had in December 2018 initiated bankruptcy proceedings against Mallya, who owes the banks more than Rs 9,000 crore.
In May, the London court had upheld the bankruptcy application moved by the consortium of banks allowing them to waive their security over Mallya’s assets. Judge Michael Briggs had set Monday as the date for final arguments in the case.
Mallya is currently on bail in the United Kingdom while a confidential legal matter in the country is resolved. This is believed to be related to an asylum application.
In February 2017, India had submitted an extradition request to the United Kingdom after Mallya made it clear he would not return. In July 2019, the United Kingdom High Court allowed him to challenge his extradition order.
In January, New Delhi said the United Kingdom government had informed it that Mallya cannot be extradited until the “confidential legal issue” related to him is resolved. However, the UK government has refused to provide details of the proceedings or disclose how long it would take to resolve the matter.
Mallya has repeatedly denied the charges against him and offered to pay back 100% of the amount borrowed by Kingfisher Airlines, but neither the banks nor the Enforcement Directorate have been willing to accept the offer. He also claimed that the allegations against him were related to borrowing only Rs 900 crore.
The debt sought by the banks comprises principal and interest, in addition to compound interest at a rate of 11.5% per annum from June 25, 2013. Mallya has also made applications in India to contest the compound interest charge.