With the arrest of Vijay Mallya in London on Tuesday – on charges of money laundering, cheating and conspiracy – India has taken its first step towards his extradition.
The arrest shows both the Indian government’s intent to eliminate corruption by acting against those who misuse taxpayers’ money and Britain’s willingness to cooperate.
India made an extradition request for Mallya in February, and Finance Minister Arun Jaitley’s visit to the UK in March helped in speeding up the process.
For India, Mallya’s arrest is the second strike against corruption after demonetization in November last year. Prime Minister Narendra Modi’s government wants Mallya returned after it took the blame for failing to stop him from fleeing to London in March last year. Mallya was then a member of the upper house of Parliament.
His arrest sends a strong message that the law will catch up with corrupt Indians wherever they are. The former liquor and aviation tycoon left India when courts issued him with summons and banks went after him over US$1.4 billion in loans given to his failed Kingfisher Airlines.
Yet Mallya’s extradition may take months – as he will challenge it in the courts. The legal battle begins on May 17 when his case will be heard by Westminster magistrates court.
To date, the UK has extradited only one man to India. Samirbhai Vinubhai Patel was returned to face trial for his role in the Gujarat riots of 2002.
Mallya’s extradition depends on the merits of the case against him. India must present strong evidence, as he can afford to hire top lawyers in England to fight the case.
Soon after Mallya’s arrest, India’s two main political parties in India claimed the credit. Modi’s Bharatiya Janata Party (BJP) said it had relentlessly pursued his extradition, while the Congress party insisted it was its constant pressure that made the federal government act.
BJP alleged bad loans to Mallya were sanctioned when the Congress-led UPA government was in power. It said the then Prime Minister Manmohan Singh took a special interest in helping Kingfisher Airlines when it was deep in debt.
The Congress party criticized the Modi government for nominating Mallya as a member of the Rajya Sabha (upper house) in 2010 – but the “grand old party” had originally backed his nomination in 2002. Congress also questioned BJP for taking the extradition route, which is time-consuming. A deportation request, if granted, could have saved ensured his immediate custody, they argued.
But Britain deports only those who land without proper travel documents.
The blame game will continue if the case drags on, but in truth Mallya was friendly with all political parties and he generously funded election campaigns for both the BJP and Congress at different times. Little wonder that banks extended loans to Kingfisher Airlines even when it went deep into the red.
When he owed his airlines staff US$120 million in salaries, he threw a lavish party for his 60th birthday at a five-star beach resort
As it fights for Mallya’s extradition in London, India should also investigate who pressured financial institutions such as IDBI Bank, State Bank of India, Punjab National Bank, Bank of India and Bank of Baroda to sanction loans to Kingfisher Airlines. The name of a former minister is mentioned in this connection.
The Modi government has a list of people wanted for money laundering and fraud and it will be making extradition requests for them in the months ahead. The debts of some of these corporate titans may be much more than what Mallya owes to banks. But what makes him different from them is the way he treated his airline staff.
When he owed them US$120 million in salaries, the flamboyant businessman last year threw a lavish party for his 60th birthday at a five-star beach resort.
The early extradition of Mallya is more important to these employees and banks than to politicians. The government should use all its resources to win the case and bring him home to face justice.