Mallya gets bail from UK court; extradition still a long way off

Vijay Mallya, the Kingfisher Airlines Ltd promoter arrested in London on Tuesday, will return to a UK court next month as Indian authorities attempt to extradite him to face fraud charges (See: Vijay Mallya arrested in London, likely to be deported to India).

The 61-year-old surrendered his Indian passport during a London court hearing on Tuesday before being released on £650,000 bail. He is scheduled to return for another hearing 17 May. A spokesman for Mallya, who disputes the charges against him, declined to comment.

Mallya's arrest comes after a special Indian court in June declared the flamboyant former liquor baron a proclaimed offender in a case involving loans to his airline.
That helped pave the way for banks to take over his properties and auction assets such as his personal private jet and properties in Mumbai and Goa (See:Vijay Mallya's Kingfisher Villa in Goa finally sold for Rs73 crore)

 A consortium of 17 banks accuses him of wilfully defaulting on more than Rs9,100 crore in debt accumulated by Kingfisher Airlines.

The UK court ''will consider'' if he can get a fair trial in India, the nation's former additional solicitor general A S Chandhiok told Bloomberg in an interview. ''He may say 'Everything is against me, the media is prejudiced against me,' '' to avoid getting extradited, he said.

The beleaguered tycoon left the country a year ago saying he was moving to England to be closer to his children. Lawmakers criticized Prime Minister Narendra Modi's government for failing to impound his passport and prevent him from leaving. His airline defaulted on the loans guaranteed by Mallya and United Breweries Holdings Ltd.

''Vijay Mallya is a victim of circumstance,'' Satish Maneshinde, an Indian lawyer told BloombergQuint. ''His contention that he is being hounded politically and through the media may find favour'' in the UK, he said.

Mallya has maintained that Kingfisher was an ''unfortunate commercial failure'' because of macroeconomic factors and government policies. He has sparred with local media for portraying him as the poster boy for the nation's bad loans. He has said that government agencies ''are pursuing a heavily biased investigation and are already holding me guilty without trial after which I need to prove my innocence''.

''Usual Indian media hype,'' Mallya wrote in a Twitter post on Tuesday after reports of his arrest.

Mallya left the country 2 March, prompting the government's attorney general to label the businessman as a fugitive at a hearing in the Supreme Court in New Delhi. The Indian banks, fighting to recover dues from the chairman and founder of the airline - named after Mallya's best-selling beer brand - were told in court that their petition to bar him from leaving the country was filed a few days too late.

India's Enforcement Directorate has been seeking Mallya's extradition over accusations of diverting some funds from loans to buy property abroad. A Mumbai court had previously issued a non-bailable arrest warrant against Mallya, whose businesses included liquor and an airline.

''Extradition from the UK is a long, winding procedure and Mallya will have enough opportunities to challenge it in various forums,'' said Pooja Dutta, managing partner at Mumbai-based Astute Law. ''The process is complex and can go on for years.''

The Indian government eventually cancelled his passport after he failed to appear before the Supreme Court in a separate case.

Can't leave UK

In addition to the bail and surrendering his passport, the London court on Tuesday ordered Mallya not to leave England or Wales and keep his mobile phone - fully charged - with him at all times.

After taking over a beer and liquor empire from his father in the 1980s, Mallya started Kingfisher Airlines in 2005, which was one of India's leading carriers until it was grounded in 2012 amid mounting debt.

Mallya also gradually ceded control of his beer and liquor empire to rivals. Diageo Plc bought his United Spirits Ltd in April 2014. Heineken NV is now the biggest shareholder of United Breweries, the maker of the nation's best-selling Kingfisher beer.

Mallya said previously he neither had the intention or any reason to flee, and personally he wasn't a borrower or a ''judgment defaulter''. He said he was ''most pained as being painted as an absconder'' when he was a non-resident for almost 28 years.

The man at the centre of India's battle against soured loans was ranked the 45th-richest Indian by Forbes in 2012, with a net worth of $1 billion. He was earlier elected to the Rajya Sabha in 2002 and again in 2010, both times as an independent.