Vijay Mallya gets mild reprieve; UK court allows access to £1.1M for legal & living costs

Fugitive businessman Vijay Mallya on Monday was granted access to around 1.1 million pounds from court-held funds to meet his living expenses and legal costs by the High Court in London. 

Deputy Insolvency and Companies Court Judge Nigel Barnett presided over a remote hearing to rule over the level of access to the funds held with the Court Funds Office (CFO), as part of bankruptcy proceedings brought by a consortium of Indian banks led by the State Bank of India (SBI) in pursuit of unpaid loans.

Mallya permitted to withdraw funds

By the latest order, the former Rajya Sabha MP has been given permission to withdraw funds from court to meet his living expenses through to August and to meet his incurred and future legal costs in relation to opposing the bankruptcy petition.

"On balance, Mallya has been successful on two aspects and the petitioning creditors [Indian banks] have been largely successful in defending the greatest part of the application," Judge Barnett noted, during the hearing which related to the question of costs associated with the "validation application".

The expenditure incurred from the CFO could face further scrutiny at a later date on the conclusion of the Indian banks' bankruptcy petition, being represented in the UK court by the law firm TLT LLP, news agency PTI reported. Mallya remains on bail in Britain, having lost a separate legal battle against extradition to India to face charges of fraud and money laundering.

Vijay Mallya's appeal to UK Home Secretary

Last month, he had appealed to the UK Home Secretary Priti Patel for "another route" to remain in the United Kingdom. Mallya's legal representative made the claim during a hearing into the tycoon's bankruptcy proceedings at the UK High Court in London. There has been speculation that Mallya has sought asylum in the UK, which can be requested on a number of grounds, from a human rights perspective to political asylum.

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The bankruptcy proceedings remain ongoing as part of the Indian banks' efforts to recoup around 1.145 billion pounds in unpaid loans related to the now-defunct Kingfisher Airlines. 

The SBI-led consortium of 13 Indian banks, which also includes Bank of Baroda, Corporation bank, Federal Bank Ltd, IDBI Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Punjab & Sind Bank, Punjab National Bank, State Bank of Mysore, UCO Bank, United Bank of India and JM Financial Asset Reconstruction Co. Pvt Ltd, had initiated the proceedings against Mallya in December 2018. There have been a series of hearings in the case and related cost matters since then.

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(With agency inputs)