The United Kingdom’s Financial Intelligence Unit had red-flagged a £17.86-million (Rs 170 crore) transfer that liquor baron Vijay Mallya made to a bank in Switzerland in 2017, The Indian Express reported on Wednesday.
The UK agency alerted Indian authorities on June 28, 2017, triggering the move for 13 lending banks to form a consortium and jointly move towards freezing Mallya’s assets in the United Kingdom.
Unidentified officials told the daily that the Financial Intelligence Unit turned Mallya’s bank transfer into a Suspicious Activity Report or SAR and marked it for information to the Central Bureau of Investigation and to the Enforcement Directorate in New Delhi.
At a meeting between officials of the two agencies in London, the British reportedly suggested that to restrain Mallya from disposing of his assets, lenders should try to extend to the UK the enforcement of a Debt Recovery Certificate and a tribunal order passed against the businessman in February 2017.
Reports of the State Bank of India’s Stressed Assets Management Group shows that a joint director of the Central Bureau of Investigation first suggested the enforcement of the Debt Recovery Certificate in the UK since Mallya owned substantial assets there.
The transfer to Switzerland could not be stopped due to the time required by Indian banks but enforcing the debt recovery certificate eventually led to Mallya losing control of his assets in the United Kingdom, valued at £1.14 billion (Rs 10,910 crore), through a Worldwide Freezing Order in November 2017.
A UK court order noted that in February 2016, Mallya had moved a $40-million (Rs 291 crore) settlement he received from beverage company Diageo into bank accounts of trusts where his children were the beneficiaries. Mallya’s shares in the Sahara Force India Formula One team, two yachts, Tipu Sultan’s sword and funds in bank accounts were prohibited from “dissipation”.
A note published by the State Bank of India on July 5 listed the steps required to implement the freezing of Mallya’s assets in the UK and Wales. The bankers said because of the complex ownership structures of the liquor baron’s identified assets, bankruptcy proceedings against him should be initiated. The note stated that a High Court Enforcement Officer should be appointed to seize and sell his bungalows.