(Bloomberg) -- Vijay Mallya, the Kingfisher Airlines Ltd. executive arrested in London Tuesday, will return to U.K. court next month as authorities attempt to extradite him to face fraud accusations in India.
The 61-year-old surrendered his Indian passport during a London court hearing Tuesday before being released on 650,000-pound ($830,000) bail, according to court records. He's scheduled to return for another hearing May 17. A spokesman for Mallya, who disputes the charges against him, declined to comment.
Mallya's arrest comes after a special Indian court in June declared the flamboyant former beer baron a proclaimed offender in a case involving loans to his airline. That helped pave the way for banks to take over his properties and auction assets such as his personal private jet, and sought to have him extradited from the U.K. A consortium of 17 banks accuses him of willfully defaulting on more than 91 billion rupees ($1.4 billion) in debt accumulated by Kingfisher Airlines.
The U.K. court “will consider” if he can get a fair trial in India, the nation's former Additional Solicitor General AS Chandhiok said in an interview. “He may say ‘Everything is against me, the media is prejudiced against me,'” to avoid getting extradited, he said.
The tycoon left the country a year ago saying he was moving to England to be closer to his children. Lawmakers criticized Prime Minister Narendra Modi's government for failing to impound his passport and prevent him from leaving. His airline, which once helped redine premium travel as India's No. 2 carrier, defaulted on the loans guaranteed by Mallya and United Breweries Holdings Ltd.
“Vijay Mallya is a victim of circumstance,” Satish Maneshinde, an Indian lawyer told BloombergQuint. “His contention that he is being hounded politically and through the media may find favor” in the U.K., he said.
For more news on attempts to sell Mallya's assets, click here
Mallya has maintained that Kingfisher was an “unfortunate commercial failure” because of macroeconomic factors and government policies. He has sparred with local media for portraying him as the poster boy for the nation's bad loans. He has said that government agencies "are pursuing a heavily biased investigation and are already holding me guilty without trial after which I need to prove my innocence."
“Usual Indian media hype,” Mallya wrote in a Twitter post Tuesday after reports of his arrest.
Mallya left the country March 2, prompting the government's attorney general to label the businessman as a fugitive at a hearing in the Supreme Court in New Delhi. The Indian banks, fighting to recover dues from the chairman and founder of the airline -- named after Mallya's best-selling beer brand -- were told in court that their petition to bar him from leaving the country was filed a few days too late.
For news on India's battle to extradite Mallya, click here
India's Enforcement Directorate, a federal body that probes violations in foreign exchange transactions, has been seeking Mallya's extradition over accusations of diverting some funds from loans to buy property abroad. A Mumbai court had previously issued a non-bailable arrest warrant against Mallya, whose businesses included liquor and an airline.
"Extradition from the U.K. is a long winding procedure and Mallya will have enough opportunities to challenge it in various forums," said Pooja Dutta, managing partner at Mumbai-based Astute Law. "The process is complex and can go on for years.”
The Indian government eventually canceled his passport after he failed to appear before the Supreme Court in a separate case.
Bail Conditions
In addition to the bail and surrendering his passport, the London court on Tuesday ordered Mallya not to leave England or Wales and keep his mobile phone -- fully charged -- with him at all times.
After taking over a beer and liquor empire from his father in the 1980s, he started Kingfisher Airlines in 2005, which was one of India's leading carriers until it was grounded in 2012 amid mounting debt.
Mallya also gradually ceded control of his beer and liquor empire to rivals. Diageo Plc bought his United Spirits Ltd. in April 2014. Heineken NV is now the biggest shareholder of United Breweries, the maker of the nation's best-selling Kingfisher beer.
Mallya said previously he neither had the intention or any reason to flee, and personally he wasn't a borrower or a “judgment defaulter.” He said he was “most pained as being painted as an absconder” when he was a non-resident for almost 28 years.
The man at the center of India's battle against soured loans was ranked the 45th-richest Indian by Forbes in 2012, with a net worth of $1 billion. He was earlier elected to the Rajya Sabha, India's upper house of Parliament, in 2002 and again in 2010, both as an independent.
--With assistance from Anto Antony Upmanyu Trivedi and Suzi Ring
To contact the reporters on this story: Anurag Kotoky in New Delhi at akotoky@bloomberg.net, Patrick Gower in London at pgower@bloomberg.net.
To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net, Anthony Aarons
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