9 May 2018
Meanwhile in court...
Vijay Mallya has suffered a serious setback in the high court in London with a judge ruling that a legal judgment against him in India can be enforced against his assets in England and Wales, which means that they may be seized and sold. The ruling, handed down by Andrew Henshaw QC, was sought by a consortium of Indian state-owned banks to which Malaya and various of his companies owe more that $1.3 billion. This follows an Indian ruling in the Debt Recovery Tribunal in Karnataka in January.
“There is a risk of the value of Dr Mallya’s assets deteriorating, and, or, being subject to claims by other creditors, and a risk of Dr Mallya being declared bankrupt,” Henshaw wrote. “Dr Mallya’s departure from India, to where he has never since returned, and his resistance to India’s application to extradite him to face trial on serious criminal charges, provide some grounds for regarding him as a fugitive from justice.”
The case sets a precedent allowing the use of worldwide freezing order when enforcing judgments. An application to appeal was rejected on the grounds that there is a serious risk that Mallya could dispose of his assets, referring in his response to Diageo money that Mallya placed in trust funds for his children and to a valuable sword that he claims to have given away. Mallya was ordered to pay costs of $300,000.
Mallya is still waiting to hear whether the extradition case against him in the UK will go ahead but remains in the UK with his creditors now able to sell his assets.
it is not clear whether his shares in Force India will be covered by the order. The team is owned by a Luxembourg holding company and his shares are controlled by a company in Mauritius. However, Mallya needs to live and is used to an expensive lifestyle and so he maybe need to sell assets elsewhere. His partner in Force India, Subrata Roy of Sahara, in similar trouble in India last week agreed to sell the Plaza Hotel in New York.