Setback for fugitive Indian tycoon Vijay Mallya in $1.36bn bankruptcy battle

UK-based former airline and Formula One boss had been fighting to overturn order sought by 12 banks

Indian tycoon Vijay Mallya smokes outside court for a break as he attends a hearing at Westminster Magistrates Court in central London on December 10, 2018, where a decision is expected on his extradition case.  Vijay Mallya, a business tycoon who owned a Formula One team, is subject to an extradition request from India, where he left 2016, accused of fraud.  / AFP / Ben STANSALL
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Fugitive Indian tycoon Vijay Mallya has lost his latest legal tussle against a coalition of state-run banks pursuing him over more than £1 billion ($1.36bn) in debts.

The banks are seeking a bankruptcy order following a debt judgment against Mr Mallya.

The tycoon’s lawyers went to the High Court on Wednesday to appeal against a judge’s earlier ruling not to dismiss the bankruptcy petition.

They claimed that an offer on the table in India made by Mr Mallya could wipe out the debts and a court there had yet to rule on it.

But Mr Justice Birss refused Mr Mallya’s request for an appeal amid a dispute over whether there are enough funds to satisfy the claimants. The banks are set to press their claims later this year in the UK.

It was the latest decision to go against the embattled former Formula One boss.

Mr Mallya, 65, also faces criminal charges of fraud and money laundering in India following the failure of his luxury Kingfisher airline and has unsuccessfully tried to overturn a 2018 order for his extradition.

Mr Mallya, the self-styled 'King of Good Times', inherited a family brewing empire in the 1990s and embarked on a series of acquisitions.

He set up the airline in 2005 with an unashamed pitch to the country’s middle classes.

But he fled to the UK in 2016 after being accused of misusing loans for the ailing airline that was hit hard by the 2008 financial crash.

Money from the loans was pumped into a vanity project, his racing team Force India, and a corporate jet, according to court documents.

The business empire of one of India’s best known company bosses unravelled with the grounding of his airline.

The ruling represented the second defeat in a week for Mr Mallya after a judge said he could not access funds held by the court to pay legal fees.

He had claimed that he had been targeted in a politically-motivated campaign by the Indian government to quell public anger at the accumulation of bad debts by Indian state-owned banks.

But his legal battles have exposed the lavish spending and lifestyle of one of India’s wealthiest men who was described by a British judge as a “glamorous, flashy, famous, bejewelled, bodyguarded, ostensibly billionaire playboy”.

It has also highlighted the difficulties of unravelling Mr Mallya’s assets that are held through a network of complex ownership structures. He has denied wrongdoing and blames the global financial crisis for the collapse of his empire.