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ED looks to sell Vijay Mallya’s shares before extradition

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By Rashmi Rajput

The Enforcement Directorate (ED) plans to auction Vijay Mallya’s equity holdings attached by the agency once the special Prevention of Money Laundering Act (PMLA) court passes its order on confiscating his assets.

The order is likely in the second week of February, said people with knowledge of the matter. The ED wants to sell the shares to get maximum value, rather than waiting until Mallya gets extradited to India, they said.

“In the event of Mallya’s extradition, there is a possibility that the value of the shares might slump. This might bring the shares below the current value of Rs 11,000 crore and therefore, we are deliberating the idea of auctioning the shares before,” said one of the persons cited above.

“However, with multiple parties staking claim to Mallya’s assets, commencing the auction process will be delayed and this could happen only once the PMLA court decided on who is eligible to stake claim.” The PMLA court will decide next month if the attached properties are free of encumbrances.

“At least three parties, including Mallya’s stepmother and the Karnataka government, have staked claims. Next month, the PMLA court will decide if the titles are clear. If it finds anyone has a claim, then… a special committee will decide on the title and even give an option to either avail of their share when the property is sold or purchase the property minus their share,” said the official.

In October last year, the PMLA court allowed interventions by Mallya’s stepmother Ritu Mallya, Heineken NV and the official liquidator appointed by the Karnataka High Court.

In her application, Ritu Mallya said the ED had wrongly attached 17 per cent of shares of two companies that belonged to her. The liquidator had been appointed to take over United Breweries Holdings Ltd (UBHL) after a single-judge bench of the Karnataka high court ordered its winding up in 2017.

Other than the shares, the ED has attached properties in Mumbai, New Delhi, Tamil Nadu and Bengaluru. These include a 309,000 sq ft UB City property pegged at Rs 713 crore and Kingfisher Tower flats estimated at Rs 1,000 crore in Bengaluru. The immovable properties are valued at about Rs 1,200 crore. Mallya is awaiting the UK home secretary’s decision on his extradition, expected by February 9.

“This decision is only limited to whether Mallya’s extradition should be allowed. In case it’s allowed, he appeals, in case it’s rejected, the government of India will appeal before the London High Court.

Mallya so far hasn’t availed his legal remedy of challenging the December 10 order of the Westminster Magistrates’ Court allowing Mallya’s extradition to India. He can appeal before the HC and, whenever he does so, we will oppose it,” said another official aware of case details who didn’t want to be named.

Source: Economic Times