#Mallya: ED unearths more muck, but he may still not face the law

Mallya has been evading summonses from the ED, prompting the agency to seek a non-bailable warrant against him. It was on the advice of the ED that the MEA had initiated proceedings against Mallya under the Passports Act, which led to the suspension, and eventually revocation, of his passport.

The ED's application for non-bailable warrant details how Mallya has been evading the agency's investigations. He initially claimed he had gone out of India to attend prior commitments in Europe and asked to appear in the ED office in early April. The ED summoned him again on 2 April, but he came up with "another excuse" that he negotiating with various European entities to help him honour his offer of a one-time settlement with the Indian banks. Another summons was issued on 9 April, and this time he again asked that his personal appearance be postponed till 30 May.

Proceeds if crime

In the application, the ED accuses Mallya of being "actively involved in the generation of proceeds of crime through scheduled offences and subsequent layering and laundering of the same".

It also claims that the loans sanctioned to Mallya by the IDBI Bank were not backed by quality collateral. For example, the brand value of Kingfisher was a collateral, and it was unreasonably valued at Rs 3,406 crore.

The application further alleges that of the Rs 900 crore IDBI loan, Mallya parked Rs 423 crore abroad. "Payments of various amounts to companies apparently unrelated to the business were made," the application says. "Scrutiny of loan utilisation statement of IDBI revealed that a huge amount of Rs 423 crore has been remitted out of India on account of aircraft lease rent, import of spare parts and aircraft maintenance services."

The ED has now sent references to France, Ireland, the UK and the US to verify the veracity of these transactions.

The ED claims that "through interrogation and reliable sources, a specific input has come on record saying Mallya has acquired properties in foreign countries", and that "there is a possibility that these properties were acquired from the proceeds of the crime in the present offence."

A source in the ED confirmed the agency has received details of his foreign assets.

Interestingly, a report on the website Firstpost attributed to CBI sources claims the agency has not been able to find criminality in the transactions conducted by Mallya and his companies. And that "the government's knee-jerk reactions in the Mallya episode seemed like pursuing a wild-goose chase that may end up investigators in a legal cul de sac".

In another setback to Mallya, the ethics committee of the Rajya Sabha has asked him for his defence before it takes a decision on his membership. It seems likely he may be expelled when the committee meets on 3 May. He was nominated to the Upper House in 2010.