India fights for the jewels of Vijay Mallya’s former empire

Lawyers probe complex company structures in hunt for homes and assets of tarnished tycoon

Vijay Mallya faces extradition to India over the collapse of his airline. AP

Thirteen years after the Indian tycoon Vijay Mallya brought home the sword of an ancient ruler to great acclaim in his native India, his family forced him to give it away.

After the collapse of his upmarket airline and the scorching of the reputation of one of India’s best-known businessmen, they concluded that the sword of Tipu Sultan, the deposed eighteenth-century ruler of the kingdom of Mysore, had brought nothing but bad luck. But if the aim was to reverse his failing fortunes, it has proved an abject failure.

Three years on from the mysterious giveaway of the sword bought for £188,000 at a London auction, Mr Mallya is fighting extradition to his native India, battling banks over unpaid loans and threatened with bankruptcy.

Britain’s interior minister signed off on Mr Mallya’s extradition to India on Monday where he is wanted for money laundering and fraud following the collapse of his upmarket private airline Kingfisher.

But lawyers from 13 state-owned Indian banks are gearing up for a bigger global battle to try to claw back assets from the wreckage of his business empire and have filed a bankruptcy petition, they confirmed in a statement.

The banks have already won a £1.1 billion ruling in their favour in India and a London court has frozen the businessman’s assets.

Attempts to identify Mr Mallya’s possessions have been complicated by the complex company structures that he used for his business that ranged from a Formula One motor-racing team, an Indian Premier League franchise, a drinks empire and the now defunct airline.

He said in July that he would hand over British assets held in his name but he said they amounted to a “a few cars, a few items of jewellery”.

“There’s no question of being homeless because at the end of the day, they are entitled to take my assets in my name declared on oath to the court. They can’t go one step beyond,” he told Reuters.

Lawyers have taken steps to try to establish who owns what of what is left of the flamboyant businessman’s wealth after he left India for the UK in 2016.

The three properties and the super-yacht ‘Force India’ used in the UK by Mr Mallya are owned by other members of his family, according to UK court documents in May last year.

The 165-foot motor yacht - complete with a VIP stateroom and room for ten guests and seven crew - is currently listed as being on sale for $14m.

Mr Mallya has allegedly breached court orders by failing to detail  financial transactions including the purchase of a Ferrari 246 GTS with an estimated value of £480,000. He also disposed of other assets included two classic cars without proper authorisation, the documents said.

Mr Mallya’s mounting legal woes come as Swiss bank UBS seeks to repossess a plush historic townhouse overlooking London’s Regent’s Park after a failure to pay back a five-year £20 million loan.

He was listed as living there with his son and 92-year-old mother, but the owner of the property is a British Virgin Islands-registered company, that is ultimately owned by a Mallya family trust.

He also has a home in Hertfordshire, 20 miles north of London, where waters from fountains cascade into garden pools and there is enough room in the garage for four cars, according to the Guardian newspaper. The £11.5m mansion - purchased from the father of Lewis Hamilton, the Formula One champion – is guarded by security cameras.

Mr Mallya has declared his intention to fight the repossession order, which is due to come to court in May. He also announced on Twitter on Monday that he would fight the decision to be returned to India and a prison cell in Mumbai ahead of a highly-anticipated trial.

Mr Mallya claims the collapse of his airline was an unfortunate corporate failure but the banks accused him of failing to pay back loans of $1.3 billion despite having the money.

“Modi Government clears one more step to get Mallya extradited,” said finance minister, Arun Jaitley, in a tweet after the British government’s decision to agree the extradition.