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4-min read

UK High Court Rules in Favour of Indian Banks, Asks Vijay Mallya to Disclose Assets

Among the assets in question include the Force India and Indian Empress superyacht which was fitted with an Elton John piano around 2015 after being reportedly acquired by Mallya at a charity auction.

News18.com

Updated:July 23, 2019, 2:44 PM IST
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London: Two superyachts, a game reserve, numerous undeclared high-value and vintage cars, valuable paintings and a piano previously owned by Elton John are among the assets in contention as part of a latest legal claim by Indian banks against embattled liquor tycoon Vijay Mallya in the UK High Court on Monday.

Justice Robin Knowles, presiding over the hearing in the Commercial Court division of the High Court, ruled that he was satisfied that a consortium of Indian banks, led by SBI, have a right to the documents they are seeking to establish the true ownership of the assets they believe are linked with Mallya.

"I consider the test to be satisfied and I don't take that view lightly. I do take the view that without this disclosure the consequences are highly unsatisfactory for a judgment creditor (Indian banks) and from the vantage point of progressing towards a fair conclusion of the matter and a conclusion that is cost effective," said Judge Knowles in his ruling.

"Frankly, the answer needs to be known as to which assets are that of Dr Mallya, both for the purpose of the worldwide freezing order and enforcement of the judgment," he noted.

The consortium of PSU banks led by State Bank of India (SBI) have been pursuing the 63-year-old former Kingfisher Airlines boss in their attempt to recover some of the funds owed to them under a 1.145 billion pounds worldwide freezing order.

During Monday's hearing, they sought the disclosure of crucial documentation that would establish the true ownership structure of the VMDS Trust, named after Mallya's father Vittal Mallya (VM), in which Vijay Mallya claims he has no "beneficial interest".

"We, that is the courts in India and here [UK], are not being told the full story," barrister Nigel Tozzi told Justice Robin Knowles on behalf of the Indian banks.

He informed the court that TLT LLP, the law firm acting for the Indian banks, had asked continuing questions regarding who controls VMDS Trust after it emerged that most of the assets in contention are held by the Trust, which is associated with Mallya's family members.

"All roads lead to VMDS But the attempts to get fundamental information is quite clearly being obstructed, which supports the assertion that Dr Mallya has a beneficial interest (in the Trust)," said Tozzi, as he laid out the banks' side of the arguments.

He told the court that the "contradictory answers" received by the banks in their queries to the true ownership of assets indicates that Mallya was trying to distance himself from an image of his own creation for the world of being a "fabulously wealthy individual".

The TLT LLP have applied for a series of orders in the wake of the worldwide freezing order dating back to May last year to track down and prevent the dissipation of assets by Mallya.

In the latest application this week, they are seeking full disclosure of the complex ownership structure of many of the assets they believe ultimately belong to Mallya.

Among the assets in question include the Force India and Indian Empress superyacht which was fitted with an Elton John piano around 2015 after being reportedly acquired by Mallya at a charity auction.

A fleet of high-value cars acquired from the sale of a 1956 Porsche Spyder for 4.1 million pounds by a consultancy named TBL and some artwork from Mallya's Ladywalk property in the English village of Tewin in Hertfordshire were also referenced during the latest hearing, alongside a game reserve in South Africa and properties in London and Hertfordshire, near London.

All of these have been claimed by Mallya to be owned by either members of his family or ultimately by the VMDS Trust, which he dissociates himself from, a factor which is contested by the banks.

To establish their case, the banks' counsel referenced a series of declarations made by Mallya before the Supreme Court in India as well as information available in the public domain.

Qatar National Bank and Barclays Bank - linked with the mortgages associated with the superyachts - and Bonhams and RM Auctions Ltd - linked with some of the other assets in contention have expressed their willingness to share information to comply with any court order to be made in the case this week. However, they are seeking their legal costs in the matter as interested parties.

Force India Limited and Indian Empress Limited which respectively claim ownership rights over the Force India and Indian Empress superyachts respectively had challenged the disclosure of certain documents.

Tierra Blanca Ltd (TBL) also contested the demand for more documents from them as the claimed owners of the posh cars in question.

The opposing counsels in the case questioned the necessity and legality of the demand for the various documentation and branded it a "fishing expedition" by the banks to cast the net as wide as possible to get their hands on information.

Ultimately, the judge ruled that the Indian banks' case outweighed their assertions of confidentiality.

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