“The commercial world in India should realise it will no longer be possible for them to avail loans of public money, default on repayment and try to get away through the lanes and bylanes of twisted facts,” the order said on Thursday. Mallya is under self-imposed exile in the UK, when he fled last March under pressure from investigation agencies and courts to recover the money.
Mallya has since been declared a wilful defaulter by banks and castigated by the Supreme Court and the Karnataka High Court for not showing up. “We will await a copy of the orders passed by the DRT and accordingly file an appeal,” said a United Breweries spokesperson.
While the tribunal criticised Mallya for defaulting on his commitments, it also questioned Diageo Plc, the British liquor major, of failing to do due diligence before acquiring stake and control in United Spirits — the country’s largest liquor firm from Mallya.
“(While) dealing with a wilful defaulter, they were only taking a risk on their investments knowingly. They cannot be held to be a bona fide purchaser. For such acts of such persons, this tribunal cannot have sympathy,” Srinivasan wrote.
It also questioned the guarantees provided by Diageo Netherlands to the tune of $135 million given to Watson to repay dues to another bank after taking loans from Standard Chartered bank, saying “no one will give a guarantee for $135 million by taking $5 million.”
Before fleeing India, Mallya signed a pact with Diageo that gave him $75 million over five years, with an initial sum of $40 million transferred immediately to an offshore account.
Since then, the banks have pushed both the Karnataka High Court and the Supreme Court to direct him to deposit the funds in the courts but with little success.
The DRT has disposed the 20-odd interlocutory applications in the case and said the same are now included in the main order.