ED files money laundering case against Mallya; can’t access severance pay

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MallyaThe Enforcement Directorate has lodged a money laundering case against liquor baron Vijay Mallya and others in regard with alleged default of Rs 900 crore loan from IDBI Bank.

The sleuths are also looking at the financial structure of the defunct Kingfisher Airlines and a probe under foreign exchange violation charges could also be initiated.

The ED filed the charges under Prevention of Money Laundering Act (PMLA) based on an FIR lodged last year by the Central Bureau of Investigation in the case.

Also,  Mallya can no longer make use of $ 75 million (Rs 515 crore) he is set to receive as part of his settlement with the world’s largest liquor company, Diageo.

As part of the deal announced last month, Diageo said it would pay $40 million immediately to Mallya and the rest in instalments over five years.  The Debt Recovery Tribunal (DRT) on 7 March said he can’t touch the money for now.

The State Bank of India (SBI) had also asked for the severance package that Mallya will get for quitting Diageo-owned United Spirits as its chairperson.

Mallya and others will be questioned soon as relevant documents have been collected from various authorities and the said bank.

The ED has filed charges against Mallya and others under various sections of PMLA.  In its FIR, Mallya, director of Kingfisher Airlines, A Raghunathan, CFO, of the airlines, and unknown IDBI Bank officials have been booked by the CBI.

The CBI action came as part of its probe into criminal facets of loans declared as NPAs by state-run banks.

While a DRT order is likely in this case on 7 March, ex-Kingfisher Airlines employees have gone public against Mallya saying they have been cheated of their remuneration and service benefits.

Mallya had on 6 March said he was making efforts to reach a one-time settlement with banks through additional payments to the consortium of lenders, led by the SBI.