Fugitive businessman Vijay Mallya was declared bankrupt by a UK court on Monday, paving the way for a consortium of Indian banks led by the State Bank of India (SBI) to pursue a worldwide freezing order to seek repayment of debt owed by the now-defunct Kingfisher Airlines.
“As at 15:42 [UK time], I adjudicate Dr Mallya bankrupt,” chief insolvencies and companies court (ICC) Judge Michael Briggs said in his ruling during a virtual hearing of the Chancery Division of the high court in London.
The 65-year-old businessman remains on bail in the UK while a “confidential” legal matter, believed to be related to an asylum application, is resolved in connection with the unrelated extradition proceedings.
the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) are probing Mallya, who had fled to the UK, in connection with an alleged Rs 9,000 crore bank fraud linked to the operations of his now-defunct Kingfisher Airlines in India.
The liquor baron and pioneer of low-cost airline Kingfisher has lost his case against extradition to India already. He was denied permission to file an appeal in the UK Supreme Court, his extradition to India has become final, the ED had earlier said.
Petitioners comprise an SBI-led consortium of 13 Indian banks, including 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 as well as an additional creditor.
Together, they had been pursuing a bankruptcy order in the UK in relation to a judgment debt that stands at over GBP 1 billion.
Mallya’s legal team contended that the debt remains disputed and that the ongoing proceedings in India inhibited a bankruptcy order being made in the UK.
The debt in question comprises principal and interest, plus compound interest at a rate of 11.5% per annum from 25 June 2013. Mallya has made applications in India to contest the compound interest charge.