Vijay Mallya over-invoiced aircraft lease, says Enforcement Directorate
Major irregularities have been detected in Vijay Mallya's foreign remittances in the name of getting aircraft lease for his Kingfisher Airlines. The foreign remittances, which have been treated as proceeds of crime, were made by him to selected Mauritius-based companies where the owners had served as his former employees in UB Group.
Enforcement Directorate have issued summons to Hitesh Patel and Uday Nayak, directors of two Mauritius-based companies in this regard. Further request applications have been submitted to special court of PMLA Mumbai for onward submission under Mutual Legal Assistance Treaty request to Mauritius.
According to ED chargesheet Mallya had taken loan of Rs 900 crore from IDBI Bank in various tranches, however a large chunk of this loan amount was diverted as remittances to foreign countries in the name of leasing aircraft for KAL. He conveniently selected certain companies for leasing aircraft even when their charges were higher than rates offered by other companies.
The investigations reveal that KAL was using various class of aircraft on lease rental basis from different aircraft lessors located outside India out of which M/S Veling Ltd was also one of them. Two aircraft ATR 72-500 belonged to them which were in the name of M/S Veling Narain Ltd and Veling Sacheedanand Ltd, based in Mauritius.
The directors of the company were Hitesh Patel and Uday Narain Nayak. Both were ex-employees of UB Group, which was owned by Mallya. The rental comparison of the similar type of aircraft were undertaken, wherein it was noticed that the monthly lease rentals to M/S Veling Narain Ltd was to the tune of $ 1,99,164 and M/S Veling Sacheedanand Ltd to the tune of $ 1,98,557, which was comparatively on a higher side than those provided by other aircraft leasing companies of the same class of aircraft. The dealings were therefore suspicious in nature.
Thus preference was shown to Veling Narain Ltd- amounts were paid to them in excess than to any other owner/lessor of aircraft. ED says in its chargesheet there may be similar invoicing in case of lease aircraft of other specifications. KAL had failed to provide copies of lease rental agreements or any supporting documents to show that the transactions were genuine and bonafide. However, unless the agency gets cooperation from the foreign companies it will be an uphill task for the agency to prove the charges.
Enforcement Directorate chargesheet against Vijay Mallya has also questioned his intention at the time of taking the loans from IDBI Bank. It says Mallya concealed his Indian assets and deliberately gave his foreign properties as bank guarantees for seeking loans as he knew very well it will be difficult to attach his overseas properties.
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