Vijay Mallya, founder and chairman of defunct Kingfisher Airlines (Photographer: Chris Ratcliffe/Bloomberg)

Mallya Arrested Briefly For Money Laundering Charge Related To F1 Team

Vijay Mallya was briefly arrested for the second time in five months and let off on bail in London on Tuesday as India brought a new money laundering charge against him for allegedly diverting bank loans to his Formula One team Force India.

The new charge has been added to the original fraud case filed by the Enforcement Directorate in the Rs 900-crore IDBI Bank-Kingfisher Airlines loan case. It is “essentially showing where the money went to, for example, it is alleged that some of the funds ended up with the Force India racing team” the U.K. Crown Prosecution Service told BloombergQuint in an emailed statement.

The arrest is largely procedural, and getting bail in the U.K. is not as controversial as in India, senior lawyer Harish Salve told BloombergQuint. There may be now two parallel extradition cases against Mallya, he said.

Mallya is already out on bail after his first arrest in April following the Indian government’s extradition request to make him face trial. That hearing is scheduled for December 4 at Westminster Magistrates’ Court and is estimated to last eight days, the CPS statement said.

Explaining the rationale for Mallya’s second arrest, the CPS statement said, “As the new charge of money laundering effectively joined up with the existing fraud charges, the legal process included re-certification of the extradition request by the Home Office and a rearrest of Mallya.”

The Indian government’s handling of the Mallya case so far has been essentially for the “sake of showing that something has been undertaken, rather than pursuing something with the right intent,” Senior Supreme Court Advocate Aman Lekhi said.

If the government was serious about this issue, the purpose should have been his actual arrest. And if he is going to get bail, as we are predicting, as everyone is saying, this entire exercise is one in futility.
Aman Lekhi, Senior Advocate, Supreme Court

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