How Vijay Mallya’s ‘assets in UK’ are giving banks sleepless nights

LONDON: As high court enforcement officers are given permission to seize up to Rs 10,499 crore (£1.14 billion) of fugitive Indian tycoon Vijay Mallya’s assets in England and Wales, there is still a lot of uncertainty about what he actually owns here.
The high court gave permission on May 8 for the Bengaluru DRT judgment to be registered in English courts, paving the way for British enforcement officers to seize Mallya’s assets so that 13 Indian banks can recover the loans he borrowed.
But Mallya, team principal at Sahara Force India, said at Silverstone at the weekend that there was not much he owned here “apart from a few cars and items of jewellery” as his Tewin estate belonged to his children and his London town house to his mother.
On April 21, 2016 he had declared his international assets to the Supreme Court of India as totalling $114 million (Rs 782 crore), which included no cash assets but $5.25 million (Rs 36 crore) of “investments and cash equivalents”.
However, that declaration did not include the assets of his US-based wife Rekha and his children, the latter to whom he transferred a $40 million payout from Diageo in February 2016.
The banks’ skeleton submissions, submitted to the high court in April, said that in a December 2017 affidavit Mallya had said he “has no interest in any of the three properties” he resides in in England.
“Dr Mallya’s position in respect of his interest in the properties appears to differ depending upon circumstances,” they point out, explaining how in separate repossession proceedings brought by UBS AG, Mallya had asserted one of the Hertfordshire properties was “his” and he “had a right to occupation of Cornwall Terrace on the basis of an irrevocable licence from Rose Capital Ventures (RCV)”.

The banks show how his three homes are linked back to his family trust through a web of interconnected companies.
His London pad, 18/19 Cornwall Terrace — a lavish town house worth tens of millions of pounds overlooking Regent’s Park — is owned by the British Virgin Islands-based company RCV, also one of the defendants in the high court case. RCV is owned by Gladco Properties Inc, which is owned by Continental Administration Services Ltd (CASL), based in offshore tax haven St Kitts and Nevis, which is a trustee of the Sileta Trust, a Mallya family trust.
Mallya’s Hertfordshire estate in Tewin, Ladywalk and Bramble Lodge, worth an estimated £15 million, also has links to the family trust.
The estate’s mortgage is in the name Ladywalk LLP, which has two members, CASL and Switzerland-based Andrea Rishaal Vallabh, who is a member and director of CASL.
Ladywalk Investments Ltd, registered in the British Virgin Islands, is wholly owned by Sileta Holdings Ltd, which is wholly owned by CASL, as trustee of the Sileta Trust. It lent Ladywalk LLP £7.2 million (Rs 65.4 crore) in 2015 to purchase the property.
Last week the high court issued an order granting permission to enforcement officers to enter, search and seize goods from his Tewin estate. No other order pertaining to his other assets here has been issued yet.
The high court enforcement order on Friday noticeably did not give permission to the enforcement officers to seize any of his UK houses but rather to only seize goods belonging to him inside those houses. That is because all his homes are not registered in his name.
Even if the ultimate owner is the Sileta Trust the principle is the beneficiary has no legal ownership of the corpus of the trust and Mallya is likely to be the beneficiary. As long as he has his assets in trusts they will be very difficult to seize.
Mallya’s assets in England also include a fleet of cars which he spends Rs 14 lakh a month maintaining, according to the banks, and a 164-foot super yacht, Force India, currently moored at Ocean Village in Southampton.
Mallya failed to disclose to the Supreme Court in 2016 a Porsche Cayenne worth £70,000, a Range Rover worth £60,000, a Ferrari F430 worth £80,000, a Mini Cooper worth £16,000 and a Bentley Turbo worth £10,500, the banks state.
“There are numerous other assets which have been linked to Mallya which he denies that he owns. These comprise three yachts, numerous cars and the Mabula Game Reserve in South Africa. The registered owners are offshore companies or trusts,” they add.
Mallya has, in breach of Indian court orders, disposed of other assets worth approximately £400,000 (Rs 3.63 crore) since disclosing his overseas assets in 2016. These include the sword of Tipu Sultan, one of his Maybach 62 cars and his Maybach 57 car, the banks state.
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“A significant proportion of Mallya’s assets comprise shares in listed and unlisted companies. There is no certainty that the value of those shares will be maintained. The disclosed assets include depreciating assets, such as yachts and motor cars. Many of Dr Mallya’s other assets are subject to complex ownership structures which might take years to unravel. There is the risk that, in the meantime, Dr Mallya might be declared bankrupt,” the banks’ submissions state.