A special court in Mumbai declared absconding liquor baron Vijay Mallya a fugitive economic offender (FEO) on a plea of the Enforcement Directorate.
Mallya has become the first businessman to be declared EFO under the provisions of the new Fugitive Economic Offenders Act which came into existence in August last year.
The ED had requested the Prevention of Money Laundering Act (PMLA) court that Mallya, who is currently in the UK, be declared a fugitive and his properties be confiscated and brought under the control of the Union government as per the provisions of the new FEO Act.
Special judge MS Azmi declared Mallya an FEO under Section 12 of the Act after hearing extensive arguments from the lawyer of Mallya and the ED counsel. Mallya, accused of defaulting on loan repayments and money laundering, had left India in March 2016.
The ED had filed an application in July before the court, seeking the “fugitive economic offender” tag for Mallya under the Fugitive Economic Offenders Act, 2018. The ED had also sought immediate confiscation of about Rs 12,500 crore worth of assets.
Mallya sought a stay on the hearing of the ED’s plea but it was turned down by the special court on October 30. Mallya then appealed in the Bombay High Court, which on November 22 dismissed his plea seeking a stay on the ED’s request to declare him a fugitive economic offender and confiscate his properties.
“Mallya’s offer is nothing but a charade to evade court proceedings… If Mallya succeeds in this settlement offer, he will try to project that he has done nothing wrong and has come clean. This will deter proceedings pending against him,” a senior official had said.
A fugitive economic offender is any individual against whom warrants for arrest is issued for his involvement in select economic offences involving amount of at least Rs 100 crore or more and has left India so as to avoid criminal prosecution.
What is the fugitive law?
The law gives the government power to attach all the assets of a person who’s been declared a fugitive and not just those acquired from the proceeds of criminal activity. This will also include benami assets. The government will also establish an international cooperative mechanism later to attach even the foreign assets of those declared fugitives.
A court can declare a person a fugitive based on whether any of the offences listed in the law have been committed. Currently, under the Prevention of Money Laundering Act, the Enforcement Directorate provisionally attaches property acquired from the proceeds of crime and gets unencumbered right only after conviction. The process is usually a long-drawn one.
An administrator will be appointed to manage and dispose of confiscated property under the fugitive Bill.