The top management of the country’s largest bank, State Bank of India (SBI), has been accused of ignoring an explicit warning issued by its top lawyer to stop the imminent escape of fugitive businessman Vijay Mallya. According to sources in the investigating agencies, this lapse could have led to the loss of several thousand crores of public money. The SBI has refused to share the details of what transpired between the bank management and the senior Supreme Court lawyer, Dushyant Dave, who asked the bank to stop Mallya from escaping. Dave was at the time advising the SBI on the Mallya matter in a meeting that was held just two days before the businessman fled the country on 2 March 2016.
In an RTI query filed with the bank, this reporter had asked for the details of the correspondence that took place between the SBI management and Dave on 28 February 2016 regarding the action to be taken in the case of Mallya; as well as details of the correspondence between the then SBI chairman and the top management regarding Mallya during the same period.
The bank has, however, declined to share the information stating that it involved “commercial confidence that was related to third party”.
Multiple sources, who were closely associated with this development at the time, said that the top SBI management was warned days in advance that Mallya was planning to leave India permanently. Despite Dave advising them to immediately move the Supreme Court seeking a restraining order and the SBI agreeing to his suggestions initially, the bank somehow failed to move court. This gave Mallya the much-needed opportunity to escape, especially as the Airport Lookout Notice against him had been diluted by individuals still unnamed.
Speaking to The Sunday Guardian, Dave asserted that a team comprising the top management of the SBI had met him just days before Mallya fled on 2 March 2016: “It was a Sunday evening (28 February 2016) when the SBI team, led by its legal head, along with four-five other top officials, met me. The matter was obviously important enough for them at the time or else why would they want to meet on a holiday.”
“I told them that we should immediately move the Supreme Court (to stop Mallya from leaving the country) and it was decided that an application would be filed in the Supreme Court the next morning. Accordingly, it was listed for a hearing at the CJI’s court at 10.30 am. However, no one from the SBI turned up on Monday, and I was later informed that they did not want to pursue it,” Dave told this newspaper.
The SBI at the time was headed by Arundhati Bhattacharya, who has enjoyed excellent relations with both the UPA and the NDA.
Bank sources said that the line of thinking changed “from stopping Mallya to allowing him” within hours of the Dave-SBI meeting. They alleged that people at the top management of the bank and the top people in the Ministry of Finance came together and decided not to file any application in the case.
However, unless an inquiry is carried out by investigating agencies, such an assertion must remain conjecture. What is clear is than an SC order on a petition filed before it could have stopped Mallya from leaving for London.
Emails sent to the SBI Corporate Communication Department seeking its response on the issue went unanswered. SBI sources said that no one was willing to comment on this.
According to legal experts, the very fact that the bank has given an evasive reply to the RTI indicates the need for a probe. “The RTI query has not asked for any commercial details or the financial policy of the bank. Then how can they deny it on the ground of commercial confidence? The third party that such silence could assist is Vijay Mallya, a fugitive and alleged offender,” said a top lawyer who is aware of the entire matter.
Sources in touch with the developments said that the top SBI management was “probably aware” of Mallya planning to flee the country, hence their sudden approach to its senior counsel, Dave, to seek ways to stop him from fleeing.
“Why did the SBI back off from filing the application to restrain Mallya at the last moment? Does the legal head have the power to take such a step? Or did orders to do so come from the top management?” asked a source familiar with the development.
The total outstanding exposure of the consortium of 14 banks led by SBI, to the now-defunct Kingfisher Airlines was Rs 7,000 crore when Mallya fled. The SBI has an exposure of Rs 1,458 crore, followed by IDBI Bank (Rs 728 crore), Punjab National Bank (Rs 710 crore), Bank of India (Rs 575 crore) and Bank of Baroda (Rs 538 crore).
The already ailing airline continued to receive financial support from the banks despite the books of the company suggesting that it was bleeding and it would not recover. The banks also seem to have overlooked concerns and signs that Mallya was allegedly diverting funds meant for the airlines to his other ventures that are mostly based outside India. As yet, any probe into such a situation does not seem to have generated results.