Fugitive Indian tycoon Vijay Mallya out on bail after London arrest

Vijay Mallya attends the launch of the Kingfisher 2014 calendar in Mumbai on Dec 21, 2013.
Vijay Mallya attends the launch of the Kingfisher 2014 calendar in Mumbai on Dec 21, 2013.PHOTO: AFP

LONDON (BLOOMBERG, REUTERS) - Vijay Mallya, the Indian businessman declared by local banks as a willful defaulter on loans taken for his Kingfisher Airlines, was arrested in London Tuesday on a request of the Indian government.

Mallya, 61, appeared in a London court, and was granted bail, Indian media reported. A spokesman for Mallya didn't respond to several calls made to his mobile phone.

A special Indian court in June declared Mallya, the former beer baron, a proclaimed offender in a loan case paving the way for banks to take over his properties and assets. He fled the country last year and has been declared a fugitive by the government over unpaid loans taken for the now defunct Kingfisher. The airline was named after Mallya's best-selling beer brand.

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 Tuesday. "Extradition hearing in Court started today as expected."

India's Enforcement Directorate, a federal body that probes violations in foreign exchange transactions, has been seeking Mallya's extradition over accusations of diverting some funds from loans to buy property abroad. After Mallya left India in March, 2016, a Mumbai court issued a non-bailable arrest warrant against him.

The government then revoked his passport and called him a "fugitive" after he failed to appear before the Supreme Court in a separate case. A consortium of 17 banks accuses him of willfully defaulting on more than 91 billion rupees ($1.4 billion) in debt accumulated by Kingfisher.

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