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‘Broke’ Vijay Mallya living off his partner & kids, UK court told

‘Broke’ Vijay Mallya living off his partner & kids, UK court told

Thursday, April 4, 2019 IST

HIGHLIGHTS

• The London high court heard that Mallya’s “partner/wife Pinky Lalwani” earns in excess of £150,000 (about Rs 1.35 crore) a year

• The former billionaire has just £328 million (Rs 2,956 crore) left in personal assets, all of which he has put towards his settlement offer in the Karnataka high court

LONDON: Once the “King of Good Times”, now Vijay Mallya is insolvent and living off his partner, his personal assistant, a business acquaintance and his adult children, a court heard on Wednesday.

The London high court heard that Mallya’s “partner/wife Pinky Lalwani” earns in excess of £150,000 (about Rs 1.35 crore) a year and that the former billionaire has just £328 million (Rs 2,956 crore) left in personal assets, all of which he has put towards his settlement offer in the Karnataka high court.

He stated in his response to a bankruptcy petition presented by 13 Indian banks on September 11, 2018, which will be heard in December 2019, that his children and Lalwani “are supporting him”, the banks’ submissions to the court state.

His personal assistant, Ms Mahal, and a business acquaintance, Mr Bedi, have even advanced sums of £84,000 (Rs 75.7 lakh) and £128,000 (Rs 1.15 crore) to him, respectively, “for living expenses and money owed to Inland Revenue”, Nigel Tozzi QC, representing the 13 Indian banks to whom Mallya owes Rs 11,000 crore, said in these submissions.

Mallya owes more than £1.142 billion to the 13 banks pursuant to the DRT judgment, which was registered in the English courts in 2017, but has made no voluntary payments to date, the court heard.

Mallya also owes £267,000 (about Rs 2.40 crore) to HMRC and an undisclosed sum to his previous lawyers, Macfarlanes, the written arguments by Tozzi disclose. He has also failed to pay £175,000 (Rs 1.57 crore) of the £375,000 (Rs 3.37 crore) he owes the Indian banks in legal costs.

Mallya’s lawyer, John Brisby QC, told the court on Wednesday that Mallya was willing to drop his weekly living allowance — permitted by the court — from £18,000 (Rs 16.21 lakh) a week to £29,500 (Rs 26.57 lakh) a month since the £16,000 (Rs 14.4 lakh) monthly payments he previously had to make on hire purchase agreements “were no longer required”.

The court also heard that South African bank Investec is owed £3.4 million (Rs 30.6 crore) by Mallya and has joined the Indian banks in their bankruptcy petition.

“He cannot on any view satisfy judgment of £1.1 billion. He is insolvent,” Brisby told the court.

The commercial court heard that the 63-year-old had put together a £1.6 billion settlement offer in the Karnataka high court using his £328 million, £969 million (about Rs 8,730 crore) from the principal debtor, UB Holdings, and £369 (approximately Rs 3,324 crore) million from third parties who “are ready to chip in assets to get rid of the claim against him”, Brisby said.

The £328 million consists of shares and properties, the value of which may fluctuate, the court heard.

Wednesday’s hearing was about an application by the banks to get their hands on money in Mallya’s current account with ICICI Bank UK Plc as part of ongoing efforts to enforce the Bengaluru DRT judgment against Mallya in the UK. The banks on January 14, 2019 got an interim third party debt order and attached the amount of £259,000 (Rs 2.33 crore), which was in his account at that time, but Mallya is asking the court to discharge that order proceedings and is opposing the order being made final.

Brisby argued that the money the banks were owed was “effectively secured in India” within the Karnataka high court offer and that the banks had failed to disclose their bankruptcy petition to the court in its application. He also said the £259,000 was “peanuts”.

Brisby said the ICICI bank account was the only liquid source from which Mallya could withdraw his living expenses. Tozzi disputed this. “Mallya has a payment from Kingfisher Beer Europe of £7,500 (Rs 6.75 lakh) a month which does not go into the ICICI account,” he said.

“There are no constraints put on his lifestyle,” Tozzi said. “He says he needs to support wife or partner and grown-up children but Pinky Lalwani, his partner or wife, earns more than £150,000 a year and the children are beneficiaries of a family trust that owns valuable collections of art, cars, million-pound properties around the world, super-yachts and a game reserve. In the bankruptcy proceedings Dr Mallya claims that they are supporting him,” he said.

“Mallya continues to live a lavish lifestyle. Dr Mallya is obtaining funding from somewhere for his lawyers. He is suffering no hardship as understood by the man on the street. He is continuing to spend £18,000 a week living expenses and incurring very significant legal costs,” Tozzi said. He gave as an example the costs of Mallya’s application in this case, which exceeded £70,000 (Rs 63 lakh), whereas the banks’ legal costs were just over £29,000 (about Rs 26 lakh).

“The banks do not accept the money they are owed is secured in India. The proceedings in India are irrelevant. There are at least eight other petitioning creditors in India which relate to these assets. Between 16 August and 16 September 2018 Mallya spent almost £250 (Rs 22,529) a week on petrol and more than £1,000 (Rs 90,118 today) a week at grocery stories. Clearly Dr Mallya felt no need to live within his means,” Tozzi said.

Master Cook will hand down judgment on the matter of the ICICI bank account next week.