F1: Mallya Used Force India and RCB for Laundering

According to a chargesheet submitted by the Enforcement Directorate, Dr Vijay Mallya used his Force India F1 Team (private company registered in London) and Royal Challengers Bangalore (IPL team) for money laundering.

A year ago, the ED had filed the first chargesheet against him and eight others for defrauding IDBI Bank of Rs 900 crore and laundering it.

The latest chargesheet says that Mallya’s Kingfisher Airlines took a loan of Rs 6,027 crore from the consortium. This includes interest till May 15, 2018, the amount becomes Rs 9,990 crore. The loan was on personal guarantee of Mallya, corporate guarantee of UB Holdings and inflated brand guarantee of Kingfisher Airlines. It was taken for operational expenses of Kingfisher Airlines but was used for other purposes, including procurement of charted aircraft for Mallya’s personal use.

The chargesheet further claimed that Mallya laundered the loan money with the help of shell companies. He did it with the help of dummy directors that he controlled. The Indian business tycoon also procured properties in name of these companies.

Mallya also allegedly took part of the money abroad through over-invoicing of lease rent for aircraft. He procured it from a Mauritius-based company for Kingfisher Airlines. The chargesheet also stated that Kingfisher took flights on lease from various companies, and the rent paid to the Mauritius-baed firm. The amount was much higher than what they were paying to other companies for aircraft of similar specification.

Other accusations include Mallya diverting part of the bank money (Rs 255 crore) to UK. From there, it was transferred into account of his F1 team in the guise of advertising and promotional expenditure. The chargesheet further stated that in 2008, Mallya siphoned off Rs 15.9 crore of the loan money from Kingfisher Airline’s account with Deutsche Bank and transfered the money into account of his IPL team RCB.