Ex-billionaire Vijay Mallya lives on $9,000 a week after court order

Mallya arrives at Westminster Magistrates Court in central London on Dec 7, 2017, for a hearing in his extradition trial.
Mallya arrives at Westminster Magistrates Court in central London on Dec 7, 2017, for a hearing in his extradition trial.PHOTO: AFP

LONDON (BLOOMBERG) - Vijay Mallya is becoming something of a fixture in London courts.

As the tycoon fights his extradition back to India on fraud charges, another set of lawyers is trying to overturn a £1.15 billion (S$2 billion) worldwide freezing order against him across town. In the meantime, Mallya has to get by on £5,000 a week, according to court documents.

On Friday, a London judge upheld the injunction, served on Mallya on Sunday, but granted a short extension to respond to the order because of the parallel proceedings over his extradition.

The flamboyant businessman is accused by more than a dozen Indian banks, including the state-owned IDBI Bank, of willfully defaulting on about US$1.4 billion in debt for his now-defunct Kingfisher Airlines.

Mallya was arrested in London in April at the request of Indian authorities. The 61-year-old is currently in the middle of a two-week extradition hearing in a bid to avoid being sent back to his home country to face fraud and money-laundering charges.

A judgment on Mallya's extradition could take several weeks. The hearing has attracted dozens of journalists due to his high-profile in India where he's often referred to as the "King of Good Times".

On Dec 3, the day before his extradition hearing began, he was served with the freezing order. The order was granted after a London judge allowed an Indian court ruling given in January over Mallya's assets to be enforced in the UK, according to a copy of the banks' skeleton arguments on Friday (Dec 8).

 
 

The banks claim Mallya is the beneficial owner of at least three properties, cars and "other valuable chattels", according to their filings. His address in Hertfordshire, England, where he lives, was bought in 2015 for £11.5 million by a company called Ladywalk that the banks say Mallya is behind.

The same company bought an adjacent lodge for £1.5 million. Another company believed to be connected to Mallya bought a property in central London in 2005 for £5.5 million. He also has at least two yachts, Force India, on sale for €13.95 million (S$22 million), and Zippo, being marketed for €329,500.

The banks claim Mallya has breached Indian court orders by dividing some of his assets up between his three children. His son and two daughters are recorded as having nearly US$30 million (S$40 million) each in property outside India, while his wife has US$14.2 million in real estate outside his country of birth.

The consortium said it doesn't know if these disclosures about his family's assets are true or if Mallya himself is in fact the true owner of all the properties.

"Dr Mallya has arranged his affairs in a way designed to avoid his creditors being able to enforce against him," Nigel Tozzi, a senior trial lawyer acting for the banks, said in filings. "The evidence of dissipation/secretion is unusually good in this case."

A request by Mallya to increase his weekly allowance while his assets are frozen from £5,000 to £20,000 was adjourned by his lawyers.

After taking over a beer-and-liquor empire from his father in the 1980s, Mallya built Kingfisher Airlines into one of India's leading carriers until it was grounded amid mounting debt in 2012. He has gradually ceded control of his drinks businesses to rivals in recent years. Diageo bought his United Spirits in April 2014, while Heineken is now the biggest shareholder of United Breweries, the maker of the nation's best-selling Kingfisher beer.

Mallya left India nearly two years ago, saying he was moving to England to be closer to his children. He has since refused to return saying he fears an unfair trial amid the "media frenzy and hysteria" over the charges, which he claims are politically motivated.

Adding to his legal woes, a third set of court proceedings against him was disclosed last month when Diageo filed a lawsuit in London seeking to recover a US$40 million payment made to him when he was ousted from United Spirits last year. Diageo is also seeking about US$141 million over questionable payments made by companies affiliated with Mallya and has named his son Sidhartha in the suit.

In Friday's skeletons, the banks said Mallya claims he divided the US$40 million payment from Diageo between his children.

Mallya is accused by Indian prosecutors of dishonestly providing worthless collateral for the bank loans and using the proceeds to prop up his Force India Formula One team, as well as pay for the lease of his private jet.