For the past 60 hours, ever since it became public that fugitive from Indian justice Vijay Mallya is on a losing wicket - or shall we say a dangerous chicane in F1 language - with India’s justice system, I have been playing the devil’s advocate in his favour. That is what any enquiry requires, especially from a media, business and in my case, a patriotic perspective. Did the many defraud India, Indians and its institutions? Yes. So I put my address book to work – it’s a hard hitter, built over three decades of heat, dust and finally trust across continents. My work doesn’t depend on only one government source. In my understanding, work means multiple unlinked sources, at least two sources per fact, documentary evidence whenever possible, time, data analysis and multiple languages. This case involves French and English for now.
I have spoken to lawyers in the United Kingdom (UK), European Union (EU) and Switzerland, tax-evasion experts, people from offices of serious fraud on both sides of the channel, criminal justice investigators, tax experts, informed journalists and human rights’ advocates. This is familiar terrain for me, with a few new faces and positive new developments in matters of mutual assistance between countries in areas of assisting each other in tracing looters and thieves. For every Mallya that gets caught, a hundred may escape, but in their flight, they leave trails, including money trails. There are not too many ways to run. In the case of the King of Good Times, the trails were characteristically large. Like the £17.86 million pounds (Rs. 170 crore) bank transfer to a Swiss bank that sent alarm bells jangling in the UK and India as it was signalled as a Suspicious Activity Record (SAR) in the UK and shared with the appropriate authorities.
The Swiss slap on Mallya’s face, following the machine in the UK that is slowly but steadily moving towards his extradition is a stinging one. C’est fini en Suisse pout votre compatriot said a person with privileged access – it’s over for your compatriot in Switzerland
The Tribunal Fédérale (TF - Swiss Federal court – the country’s apex body) concluded that this particular case did not even invite any clause of Art. 24 of Federal Law (indications of shortcomings of criminal procedures in the requesting country as the battery of the fugitive’s lawyers pleaded) and threw out the appeals as inadmissible (irrecevable IC_614.1018). The Public Prosecutor’s Office in Geneva that ruled on this case said the TF argued “Even if the petition for legal assistance was mainly for funds to be blocked, the transfer of banking information respects the principal of proportionality since the final goal of the Indian investigation was confiscation of spoils.” Three judgements against him are in the public domain and in my possession. The ball is now firmly in India’s Central Bureau of Investigation’s (CBI)’s court. It has built a robust case against Mallya and credit must be given where due.
If Mallya had nothing to hide, why did he build a web of shell companies and employ so many lawyers in the UK and Geneva? The CBI requested assistance from the Swiss last summer in tracing fraud and money laundering to the tune of one billion Euros in unpaid loans to various banks to fuel the fraudsters fancies – an airline, a Formula1 company, the United Breweries Group which he destroyed and more. He was probably working on the assumption that NPAs would be transferred to PSUs and is the case with many governments in India.
He held three accounts in the Swiss bank Edmond de Rothschild in the name of Drayton Resources, Black Forest Holdings and Harrison Finance that has an account with Compagnie Bancaire Helvétique (CBH). The companies under the radar are Ladywalk Investments, Rose Capital Ventures, a loan from a Swiss bank Union Banque Suisse (hugely implicated in Bofors) Continental Administration Services, First Europe Commercial Investments and Modall Securities.
Over the past two days, I have got assistance from a group of journalists investigating the Panama Papers and in particular, the flagrant use of Switzerland as a tax haven by dirty money. The sense of revolt cannot be underestimated. The Swiss are hard working people making this small Alpine state of eight million home to ten global brands. This is a country where Chief Economic Officers (CEOs) are at their desk at 7 a.m. and pull 18 hour-days. Presidents and ministers stand in line at crockery shops and travel by public transport. The TF is in Lausanne and not in the country’s capital Bern, precisely to avoid all issues of breach of ethics and needless camaraderie.
It is not at all unusual in my little village outside Geneva to run into Formula 1 pilots and their families who are left in peace as they go about their lives. I’ll never forget the day a local banker friend asked me what one lakh crore Indian rupees translated into Swiss Francs. Imagine what Swiss people working in the country’s justice system must have processed in their minds when Mallya’s lawyers argued that he was being made a victim. He even boasted about his golden bathroom to a journalist.
This is where the man who burnt money thought justice would not catch up with him. This is where he hid his money through a not very transparent system of accounts and a battery of lawyers because he was, in is own head, invincible. Those reading this remember this – there are people around the world documenting ever piece of information on this man. There are journalists who monitor every court proceeding anywhere in the world including Switzerland about him. There are people who document every tweet that says he’s a poor, misunderstood man.
Mallya is in serious trouble, and he knows it. He now has nowhere to run and nowhere to hide. The latter was never an issue with the King. When, on December 18th, 2019, British authorities ruled in favour of extraditing him, Magistrate Emma Arbuthnot summed up the case thus: “(He was a) glamorous, flashy, famous, bejewelled, bodyguarded (sic), ostensibly billionaire playboy who charmed and cajoled these bankers into losing their common sense.”
Magistrate Arbuthnot’s comments touch on morality, ethics and large scale hoodwinking of bankers. The first is a personal set of rules people live by. The second – hoodwinking bankers, must be taken with a pinch of salt – few bankers will walk away when large sums of monies are placed on their tables. Times are tough, they need to show clients or there is no bonus.
Ethics, however, is an entirely different issue. It is a workspace requirement and accountability to staff, taxpayers and government. If the two combine in a leader, companies thrive and blossom. Mallya, who never had to work for a day in his life – having inherited the fortunes of his very brilliant father Vittal Mallya whose penchant for numbers led him to play stock markets and invest in companies while at the university. At 22, father Mallya was elected as United Breweries’ first Indian Director in Calcutta and a year later became its Chairman*. The son - born with a silver spoon in his mouth and intellectually - got it all wrong and by all accounts stumbled even on secondary school maths.
I have a lot of respect for Arbutnonot’s legal decision to extradite him as much as I respect Swiss legal authorities who threw out his nonsensical plea about India’s bad justice system. He gained and perpetuated it. That makes him an international laughing stock. I have with me Swiss court documents that call him out in no uncertain words. His lawyers seem as good as him in simple math – they advised him to get an international freeze on his accounts, they advised no caution when he transferred £17 million in one shot to his bank account in Switzerland. This is kindergarten dangerous.
Dear readers, this is where it all kicks in, the arrogance and the assumption that the world is full of fixers and rent-seekers. This is where the man who burnt money with airlines in India, a Formula 1 team and a luxury yacht parked in Cannes for years thought justice would not catch up with him. To those reading this piece, remember this – there are people around the world documenting every piece of information on this man. There are journalists who monitor every court proceeding anywhere in the world including Switzerland about him. There are people who document every tweet that says he’s a poor, misunderstood man.
Times have changed and now I come to the CBI, my biggest worry, not because of what Mallya’s lawyers are saying, but because the nature of the beast that is India’s top investigative agency. There are people in all political parties in India from whom Mallya will now cash his IOUs. It may already be happening. Many of them have deep roots in the CBI. As a privileged Swiss source said, it all depends now on how the CBI takes the Swiss work forward.