Liquor baron Vijay Mallya had allegedly floated 20 shell companies, directors of which were either his personal staff or those who retired, the ED has said in its recent chargesheet filed in the KFA-IDBI money laundering case.
The central probe agency, meanwhile, is set to confiscate a coffee estate in Coorg in Karnataka and other assets in Bengaluru which it had attached under the Prevention of Money Laundering Act (PMLA), as it did with a Rs 100 crore farm house in Maharashtra's Alibaug recently.
The Enforcement Directorate had registered a criminal case in this deal last year and has attached assets worth over Rs 9,600 crore till now.
"Mallya was holding directly or indirectly movable and immovable assets, in the form of shares of public listed companies, by way of creating a web of shell companies.
The assets were being in shell/dummy companies created by Mallya," the ED said in its chargesheet filed in Mumbai on Wednesday.
The over 5,000 page chargesheet or prosecution compliant, with 57 pages of the main report and rest annexures, has been filed before a special PMLA court in Mumbai.
The chargesheet said Mallya had "formed a complex web structure of his group companies so as to indirectly control their affairs."
"He has nominated directors in those companies who were either his personal staff, retired company official or a third person," it said.
The agency identified the alleged shell firms as Ms PE Data Centre Resources Private Limited, Ms Pharma Trading Limited, Ms Kingfisher Finvest Limited, Devi Investment Private Limited, Ms Mallya Investment Private Limited, Ms Explicit Consultancy Private Limited, Ms Ambitious Computech Private Limited and Vilora Consultancy Private Limited among others.
Shell companies are defined as those firms which are set up by nominal paid-up capital, high reserves and surplus on account of receipt of high share premium, investment in unlisted companies, no dividend income or high cash in hand among others.
It added "there were unencumbered (free of debt) properties more than Rs 1,760.03 crore in addition to the properties mentioned in the personal guarantee submitted by Mallya to the IDBI bank", indicating that these assets were not pledged as collaterals towards security of the bank loan.
Describing how the alleged siphoning off the funds happened in this case, the agency said, "It is suspected that major portion out of amount of Rs 417.29 crore was remitted out of India to overseas parties from IDBI bank."
It mentioned a transaction made to a firm which allegedly had fake or dummy directors.
"An amount of Rs 63.10 crore (approximately) was paid to Ms UBICS Technologies Pvt Ltd (controlled by Mallya). Directors are dummy directors acting on behalf of Mallya.
"This company was used as a special purpose vehicle to route the funds of Ms KFA as no other transaction from any other company has been noticed in this," it said.
"Thus, the acts of Mallya, Ms UBHL and others, establish that a criminal conspiracy was hatched for obtaining or sanctioning of bank loan to KFA in gross violations of established procedures and the airline had no intention for repayment of loan of Rs 900 crore since beginning.
"The said loan amount along with interest totalling Rs 1,301.67 crore therefore falls within the sweep of the proceeds of crime in terms of section .... of the PMLA," the chargesheet said.
Thus, it said, the accused have been "actually involved" with the concealment, possession, acquisition and use of the proceeds of crime and therefore knowingly and intentionally in the activity of money laundering as defined under section 3 of the PMLA and are liable for punishment under section 4 of the PMLA.
A total of 9 accused have been named in the chargesheet by the ED including Mallya, Kingfisher Airlines (KFA), United Breweries (Holding) Limited and senior employees and executives of the now-defunct airline and the IDBI (Industrial Development Bank of India) bank.
The agency, in the chargesheet, has called Mallya the "prime mover of the entire plot" and has described how funds obtained from the bank loan were allegedly routed illegally including "substantial payments" being diverted by the beleaguered businessman to the Formula-1 car racing event abroad and others.
The total loan sanctioned and disbursed by the IDBI bank to KFA was Rs 860.92 crore.