Author: Yashmita, Student of Guru Gobind Singh Indraprastha University, Delhi
Background
Vijay Mallya was the single child of entrepreneur, Vittel Mallya. After death of his father, he took hold the business in 28 years age. He expands his business in various streams. In 2011, he becomes the member of upper house. But he resigned in 2016 when his second term about to end. Before that he started the Kingfisher Airlines inn 2005, Mallya wanted to expand the international route. In 2009 the Kingfisher Airlines become one the famous airlines in India. Getting permission to fly in international route, it made the heavy loss to the Mallya so he took the several loan from the 17 different bank, which he failed to pay and 2012 the licenses was cancelled and the Kingfisher airlines was Shut down. So in 2016 he fled to UK from evading the legal proceeding.
To the Point
The Vijay Mallya scam is the prominent case of fraud and financial offence in India. Mallya took the loan from the 17 banks around ₹9,000 crore primarily led by the state bank of India. The funds, obtained on the basis the basis of misrepresented financial statement and business projections. The investigation agencies like the CBI and ED found clear evidence against the Vijay Mallya criminal conspiracy, cheating, breach of trust and money laundering. In 2016 Mallya fled to the United Kingdom to evade legal proceedings. Later he was declared as the fugitive economic offender under the Fugitive Economic Act, 2018. Indian authorities have successfully attached and recovered significant assets linked to Mallya, returning a substantial portion of the defrauded money to the banks. On the other side Mallya remains in UK, contesting further proceedings and claiming that the recovered assets exceed the actual debt.
The proof
The Mallya case was handled by the CBI (Central Bureau of Investigation) and ED (Enforcement Directorate), the evidence of this case gathered by these two Indian Investigation Agencies.
Bank Loan Document and Default Records: kingfisher airlines borrowed over ₹9,000 crore from 17 banks; there are legal notice for repay the loan which Mallya failed to pay. The sanctioned loan documents revealed incomplete disclosures and false financial projection.
Fund Diversion and Misuse of Loan: A large portion of the loan was diverted to the Offshore accounts and shell companies. Loan funds were use for the personal purpose transfer inn personal account and foreign subsidiaries.
Internal Emails and Corporate Records: Emails retrieved from kingfisher official showed that internal discussions about falsifying accounts books. Instructions from Mallya to route payment and funds transfer through the non-transparent channel.
Abstract
Vijay Mallya, an Indian Businessman and former member of parliament and he is the founder of the Kingfisher Airlines, launched in 2005. Mallya was also chairman of united spirits. Mallya was also known as “The King of Good Times”. By 2012, the airlines had grounded its operations after accumulating over ₹9000 crore in unpaid loan from a consortium of Indian banks, led by the State Banks of India. In the investigation its is seen that Mallya had willfully default of ₹9000 crore and had diverted substantial funds to offshore accounts and unrelated businesses. Mallya fled to the United Kingdom in 2016, evading legal proceeding in India. Later he was declared as fugitive economic offender under the Fugitive Economic Act, 2018, on the other side the UK courts approved his extradition in 2018, his return has been delayed due to ongoing confidential legal proceedings. This case underscored serious gaps in the Indian Banking system’s risk assessment, led to greater scrutiny of corporate borrowing, and accelerated reforms such as the Insolvency and bankruptcy code (IBC),2016. The case continues to highlights complexities in cross- border financial crime prosecutions and asset recovery.
Case laws
Harshad Mehta scam (1992)
In this case Harshad Mehta, often referred as the 1992 Indian securities scam, was a large-scale financial fraud that exploited economic loopholes in the Indian banking and stock market systems. After 2:1 decision of the supreme court, altered the sentence to period of imprisonment already undergone, considering the time that had passed since the scam and Mehta’s death during the pendency of the appeal. After the death of the Harshad Mehta so many cases were abated and while so many were on still trial.
Ketan Parekh scam (2000)
Katen Parekh was a prominent stockbroker who became notorious for his involvement in a major stock market manipulation scam that unfolded in India 2000. Fo his scam he was arrested by the CBI in march 2001 and faced numerous charges. He was arrested for two-year rigorous imprisonment for cheating in 2014 and later, three years sentence for breaking rules set by SEBI. In 2025, again he alleged for ₹65.77 crore in Front-running scam.
Punjab National Bank Scam (2018)
This scam is the one of the largest banking frauds in India amounting over ₹14000 crore by Nirav Modi and Mehul Choksi. This scam involved fraudulently issuing letter of undertaking from PNB’s brady branch. Both Modi and Choksi fled India before the scam became public and they become fugitive economic offenders.
Railway Bribery Scam (2013)
Railway Bribery scam was the most prominent in India, the scam involved allegation of bribes paid for plum postings within the Indian Railway Board. It was alleged that a senior railway official was trying to secure a desired position on the Railway Board through illegal means. This case handled by CBI, and they subsequently filed the chargesheet on those persons who were behind this scam naming Mahesh Kumar, Vijay Singla, and several other individuals.
Conclusion
The Vijay Mallya scam remains a prominent example of a complex financial fraud still undergoing resolution. While a large portion of the defrauded money as been recovered and Mallya has multiple adverse rulings, particularly regarding his bankruptcy in the UK, he continues to resist extradition and challenge legal decision. The case against Vijay Mallya example of a classic case of a white-collar crime involving willful default, financial impropriety, and cross-border money laundering, meriting stringent penal consequences under Indian and international. This type of offense is committed by someone in a position of trust or, usually for financial gain and often without overt violence.
FAQS
Which investigating agencies were involved?
The investigation into the Vijay Mallya scam was primarily spearheaded by two key agencies: the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED). These two agencies solve the scam and recovered the large portion the defrauded money. The CBI focused on the criminal conspiracy and bank fraud aspect and ED took the lead on the money laundering aspect
What was the Vijay Mallya scam?
Vijay Mallya scam involved the misappropriation of 9,000 crore in loan from 17 Indian Bank primarily led by the State Bank of India. For his Kingfisher Airlines which is now defunct.
