UK court allows Indian banks to pursue surplus money from Mallya yacht sale

Wednesday 05th December 2018 01:35 EST

A consortium of Indian banks led by State Bank of India (SBI) has secured an order from a UK High Court as part of efforts to help them pursue some of the funds owed to them in unpaid debts by embattled businessman Vijay Mallya. In a ruling by Justice Phillips in the court's Business and Property division, last week, the banks were given permission to use certain information disclosed in court as part of a worldwide freezing order (WFO) against the 62-year old in an unrelated case involving the sale of a luxury super yacht which was previously owned by Mallya.

The 95-metre vessel called 'Indian Empress' was “arrested” in Malta in March as maritime professionals union Nautilus made attempts to recover over $330,000 in unpaid wages and other costs on behalf of its members. The yacht was successfully auctioned to Sea Beauty Yachting Limited for 35 million euros in September and renamed 'NEOM'. The UK High Court order will assist the Indian banks to pursue any surplus money from the sale in Malta courts after all the creditors have been paid off.

Nautilus strategic organiser Danny McGowan said the maritime union has been collating members' claims and other details to ensure that the sums due are paid to them. Nautilus said, “The court has been completing the procedures to pay all the creditors including suppliers, service providers and financiers who were owed money by the former owner multi-millionaire Vijay Mallya.” The 13 banks comprise SBI, Bank of Baroda, Corporation bank, Federal Bank Ltd, IDBI Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Punjab & Sind Bank, Punjab National Bank, State Bank of Mysore, UCO Bank, United Bank of India and JM Financial Asset Reconstruction Co Pvt Ltd. The banks seek to secure that surplus in the Maltese courts rather than it being paid to the legal owner.

Meanwhile, Mallya is currently on bail on an extradition warrant executed by the Scotland Yars last year on fraud and money laundering charges brought by the Indian government, amounting to nearly Rs 90 billion. A ruling is expected at Westminster Magistrates' Court in London next month, at the end of his extradition trial.

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