Lawyers acting for Vijay Mallya claimed yesterday that he had become the victim of an “improper” and politically motivated attack.
The tycoon behind Kingfisher Airlines is fighting extradition to India in a case at Westminster magistrates’ court.
His legal team rebuffed allegations that he had fraudulently secured bank loans worth hundreds of millions of pounds while knowing that he would never be able to repay them as being “evidentially unsupported”.
The Indian former billionaire, whose UB Group liquor empire became a launchpad for businesses including the Sahara Force India Formula One motor racing team and Royal Challengers Bangalore, the Indian Premier League cricket team, now lives in Britain.
Mallya, 61, has been accused of knowingly misleading banks over Kingfisher Airlines’ true financial condition before its collapse in 2013.
He has denied wrongdoing and is fighting extradition to India on money-laundering charges.
Clare Montgomery, QC, for Mallya, said that India’s Central Bureau of Investigation, which opened an investigation into Mallya in 2015 and brought the charges, had a “long and inglorious” history of pursuing prosecutions on behalf of the government in Delhi.
“There has been political interference with the prosecution process in a way that is improper,” she said.
The case against Mr Mallya is focused on a series of loans Kingfisher borrowed from Indian banks, especially IDBI, a state-owned lender, The Times reported.
The banks want to recover about $1.4 billion that they say they are owed by the collapsed airline.
Prosecutors claim that Mallya used part of the cash he borrowed for Kingfisher Airlines in 2009 to fund his motor racing team and other projects.
Montgomery said it was “nonsense” that Mr Mallya knew Kingfisher was on the verge of collapse when he sought to take out the loans in 2009 to prop up the airline’s finances.
She said that the treatment of Mallya fitted a pattern of politically motivated corruption allegations.
“In this instance, there is a very interesting bit of research that has been done which shows a correlation between allegations of corruption and election years,” she said. Either the Indian CBI “responds to requests made from political masters from time to time” or every year a key election comes up “you get corruption allegations”, she said.
Indian prime minister Narendra Modi has made a clampdown on corruption a central part of his appeal to voters in election campaigns.
Montgomery said: “It is simply economically and legally impossible to palm losses on to banks or by borrowing to pass on the cost of failure.”
She said that the loans included personal and corporate guarantees, which ensured “personal liabilities that may be incurred in the event of failure . . . The bank had all the information it needed to make its own assessment.”
The case continues.