MUMBAI: Fugitive liquor baron Vijay Mallya may have been cornered from a legal perspective, but it may be a while before banks can uncork the embattled Indian tycoon.
Last week, a UK high court issued an enforcement order in favour of the Indian banking consortium comprising 13 banks, to recover funds by taking control of Mallya’s assets in Britain. However, analysts feel loan recovery is several quarters away, with the Enforcement Directorate entering the picture to attach properties. In short, it could run into procedural delays, as has happened in the past with domestic assets.
“This is not a simple case of wilful default anymore and is being pursued using the cross-border dialogue. Invariably, there will be a delay in loan recovery. But all banks have factored in the possibility and made relevant provisions,” a senior banker told Express.
Recalling a previous experience, the banker said that within the country, various properties of Mallya have been seized but the response has been mixed. As on May 2018, Mallya’s firms have outstanding dues of Rs 9,990 crore, while the ED has already attached assets worth Rs 13,900 crore under the Prevention of Money Laundering Act (PMLA). SBI MD Arjit Basu last week confirmed that banks recovered just about Rs 963 crore from auctioning Mallya’s assets within the country so far.
According to sources, the Indian Banking Association will also consider writing to the Finance Ministry and the ED to request and expedite the recovery process in the UK.
Last month, breaking his silence, Mallya made a third offer to fall in line and pay up dues, but bankers ruled out that option, as the case is now being dealt under the Fugitive Economic Offenders Act. In his public statement, Mallya claimed that he made two settlement offers to banks in March and April 2016, but were duly rejected.