To tighten the screws on bank loan defaulters, the Central government will soon come up with a new law which enables “confiscation of assets” of persons who fled outside the country after defaulting on loans.
The move is triggered after the beleaguered businessman Vijay Mallya, who is in the UK for many months, has been declared as a ‘wilful defaulter’ by lenders for non-payment of loans worth over Rs 9,000 crore by his now-defunct Kingfisher Airlines.
“Government is therefore considering introduction of legislative changes, or even a new law, to confiscate the assets of such persons located within the country, budget 2017 India till they submit to the jurisdiction of the appropriate legal forum,” Finance Minister Arun Jaitley said in the budget speech on Wednesday.
Jaitely pointed out the instances of big time offenders, including economic offenders, fleeing the country to escape the reach of law. “We have to ensure that the law is allowed to take its own course. Needless to say that all necessary constitutional safeguards will be followed in such cases,” Jaitley said.
Earlier this year, Mallya had resigned as chairman and managing director of United Spirits, as part of a deal with the company’s new owner, Diageo. Mallya, however, continued to serve on the board of other companies, including UB. Diageo now owns 55 per cent of USL and Mallya had stepped down from the board in February, for a $75 million payoff.
Meanwhile, multiple probe agencies are probing the matter including Enforcement Directorate and Central Bureau of Investigation (CBI).
Mallya story is no different from former IPL commissioner Lalit Modi and others who remain out of reach of Indian law. Despite non-bailable warrant issued against him, he had escaped the ED probe for alleged violation of Foreign Exchange Management Act (FEMA). This will be highlighted as another instance that shows the inefficiency of the state to act in time against the guilty.