Karnataka HC re-issues bailable arrest warrant against Mallya

The Karnataka High Court today re-issued a bailable arrest warrant against liquor baron Vijay Mallya for allegedly violating an undertaking by him and his firms not to transfer their equity shares in United Breweries Holdings Limited (UBHL) to British spirits company Diageo Plc.

A Division bench, comprising Justices B S Patil and B V  Nagarnathna extended the returnable date of the warrant to June 1 and raised the bail amount to Rs 50 lakh for executing the bond.

The next hearing has been posted for June 1.

On January 27, a division bench comprising Justices Jayant Patel and Aravind Kumar had issued a bailable warrant, which was returnable by February 17 on executing a bond of Rs one lakh after Mallya failed to personally appear before it despite his counsel communicating the court's two orders in this regard.

The banks which lended to the fugitive businessman had accused him of violating the undertaking given by him and his companies, including the now defunct Kingfisher Airlines not to transfer their equity shares in UBL after the Debt Recovery Tribunal (DRT) restrained Standard Chartered Bank, with which the shares had  been pledged, from handing over the same to Diageo Plc.

On December 2 last, Justice Vineet Kothari of the High Court had rejected Mallya's application for recalling its order summoning him for allegedly violating the undertaking.

DRT, in its order last year, had restrained Standard  Chartered Bank from transferring to Diageo Plc or anyone else the equity shares of UBL pledged by Mallya and his son  Siddharth with the bank.

In their plea the banks had alleged that despite the earlier order by DRT, Standard Chartered Bank was in the process of transferring the equity shares to Diageo Plc.

Diageo Plc, the world’s largest spirits maker, which acquired control of United Spirits (USL) in 2012, had issued a guarantee to Standard Chartered Bank for a USD 135 million  (around Rs 877 crore) loan to Watson Limited, a firm linked  to Mallya, to release certain UBHL shares that were to be acquired as part of the deal.

The company, in a statement earlier, had said the risk had arisen due to default by Watson in May and DRT preventing sale or any other transfer of such UBHL shares in June as part of the enforcement process pending further orders following the petition by the bankers.

The banks had contended that the very pledging of the shares by Mallya was illegal.  
On January 19, DRT had ordered banks to start the process of recovering Rs 6,203 crore at annual interest rate of 11.5 per cent from Mallya and his companies including UBHL in the Kingfisher Airlines case.

On January 24, CBI had filed a charge sheet in connection with IDBI loan default case involving the defunct airlines in which its promoter Mallya is a wanted accused.
The agency had named nine people whom it arrested on January 23, leaving out Mallya as he is yet to be arrested.

Mallya had left the country on March 2 and is in the UK.

He has been declared a proclaimed offender by a special PMLA  court in Mumbai on a plea by the Enforcement Directorate in connection with its money laundering probe against him in the alleged bank loan default case.