London: Vijay Mallya’s defence on Tuesday dismissed the Indian government’s extradition case against him, saying it has no credible case to show that the tycoon’s now-defunct Kingfisher Airline’s borrowings were fraudulent or that he had no intention to pay back the loans.
The 61-year-old liquor baron, wanted in India on charges of fraud and money laundering allegedly amounting to around Rs 9,000 crores, was in the dock at Westminster Magistrates’ Court for his defence, headed by barrister Clare Montgomery.
She opened her arguments by stating that there was no evidence to support the case of fraud and repeatedly used the words “nonsense” and “nonsensical” in reference to the fraud claims laid out by the Crown Prosecution Service (CPS), arguing on behalf of the Indian government.
Dismissing the government of India’s case as “clutching at straws”, the defence said the arguments laid out were “financially incoherent” and that there had been no “concealment” and nothing to suggest Mallya was being “intentionally fraudulent”.
Montgomery claimed that the evidence presented by the CPS, on the opening day of his extradition trial on Monday, amounted to “zero”, which she said was a “critical failing on the part of government of India”.
She claimed that the government does not have a credible case to support the argument that the borrowing by Mallya was fraudulent and he had no intention to pay back the loans he sought because his profit projections for loss-making Kingfisher Airlines were unreliable.
“The reality is that the profitability of an airline depends on economic factors, which are largely cyclical and largely out of the control of the airline itself,” she said.
Indicating that it would be plausible to conclude that any loan default was the result of “business failure”, she presented internal company assessments and bank documents to prove that all numbers related to the struggling airline were known to the bankers and there was “no attempt to mislead by over-valuing the worth of the brand”.
“It is simply economically and legally impossible to palm losses on to banks or by borrowing,” she added as she went about addressing what she termed as the “three-legged structure laid out by CPS” in its case for fraud against Mallya.
The defence admitted there had been a massive falling out between the banks and Kingfisher Airlines by 2012-13, when the banks were allegedly leaking information that they were not going to support the business at a critical point for the airline trying to avoid being grounded.
Montgomery claimed that the opening up of India’s aviation sector to foreign investors around that time was a “belated decision” by the Indian Government and ended up benefiting Kingfisher’s main competitor Jet Airways, which secured a tie-up with Emirates.
All Mallya tried to do during that period of “bitterly fought litigation” in the Indian courts was not borne out of “deliberate dishonesty” but instead a “desire to fight his own corner”, it was claimed.
The defence’s opening arguments rested on countering the Indian government’s assertion that Mallya is a fraudster who was out to make “gains for himself and cause a loss for banks”.