How ED stopped Vijay Mallya & Nirav Modi getting away with the spoils of their fraud

Republic has accessed an ED note on the properties of fugitive economic offenders Vijay Mallya and Nirav Modi. This development comes hours after the economic offence watchdog informed that it has seized and attached the assets of fugitive economic offenders Vijay Mallya, Nirav Modi, and Mehul Choksi.

In the note, the ED has explained in elaborate detail, the sequence of its investigation carried out on Vijay Mallya and Nirav Modi the way his properties were seized and returned the amount to the banks that have been defrauded.

ED corners Vijay Mallya

With regards to Vijay Mallya, a request was made to the Passport Authorities for revocation of his passport which has since been revoked by the Ministry of External Affairs vide order dated 23/04/2016. Thereafter, the ED had attached Rs 807.82 crore (market value of Rs 1411 Crore) in June 2016. Second Provisional Attachment order of Rs. 4234.84 Crore (Market Value at that time Rs 6630 Crore) issued in September 2016. Vijay Mallya was declared proclaimed offender & his properties worth Rs.1694.52 Crore were attached in November 2016.

Thereafter, SBI filed an application in Sessions Court for restoration of properties attached by ED which was allowed by the court with "active assistance of ED". Part of the properties were shares held as a mortgage with HDFC bank. ED investigation revealed that the loan with HDFC Bank was for a smaller amount and the remaining shares were liable to be released. Accordingly, shares worth Rs 351 crore were transferred to a SBI-led consortium and subsequently sold by the banks in March 2020.

Similarly, another lot of shares worth Rs 1006 Crore were transferred from Yes Bank, subsequently leading to its sale and realisation by the banks.

Moreover, in May and June 2021, Court allowed SBI's application for the transfer of shares and other movable and immovable properties to the banks. The present market value of the properties is Rs 11522.49 Crore approximately. Shares of Rs 6000 crores from these properties were restored by the ED to SBI through recovery officers.

"It may be mentioned here that these shares were held in the names of various dummy/shell companies and it was the ED probe that lifted the corporate veil and established the link between Vijay Mallya and these companies. Had these shares were not attached by ED, Vijay Mallya would have dissipated these shares," said the ED.

Action against Nirav Modi

Diamantaire Nirav Modi was declared a 'Fugitive Economic Offender' by a special court vide its order dated 05.12.2019. Total 12 Provisional Attachment Order (PAO) were issued and all were confirmed by the Adjudicating Authority. The total properties then attached were Rs. 1898.12 Crore approximately by the ED. Also, one Original Application (OA) was filed for the seizure of properties worth Rs. 489 Crore.

In June 2020, the court ordered the confiscation of freehold properties of Nirav Modi amounting to Rs. 329.67 crore. Thereafter, another ordered was passed by the court for restoration of properties worth Rs 1060.60 Crore to the Punjab National Bank, which was defrauded by Nirav Modi and his uncle Mehul Choksi, the former being the prime accused. One more application requesting confiscation of remaining properties worth Rs 928.91 Crore has been filed.

The document of Enforcement Directorate accessed by Republic

Note on Vijay Mallya & Nirav Modi by Republic on Scribd

Current status of the fugitive economic offenders

Liquor baron and former MP of the Rajya Sabha Vijay Mallya, currently in the UK, faces charges of fraud and money laundering pertaining to the Rs 9000 crore borrowed by Kingfisher Airlines from several Indian banks. Mallya is betting on extradition appeals in the UK. 

Owner of Gitanjali jewellers, Mehul Choksi along with his nephew Nirav Modi is accused of duping the Punjab National Bank and siphoning off the money using letters of undertaking to the tune of Rs 13,578 Crore. Nirav Modi too is facing extradition trials in the UK, with his appeal against an extradition order being rejected on Wednesday, whereas Mehul Choksi is lodged under the custody of Dominican authorities after his alleged escape bid from Antigua failed.