Indian tycoon Vijay Mallya wins permission to use £1.2m frozen assets in court fight

Former Formula One team boss told court he needed £22,500 a month for living expenses

Vijay Mallya, an Indian business tycoon who owned a Formula One team, is accused of fraud. AFP / Ben STANSALL

Indian tycoon Vijay Mallya won permission to use £1.2 million ($1.65m) of frozen assets to fund his "eye-watering" living expenses and legal costs in his fight against criminal proceedings.

A coalition of 13 Indian banks are pursuing him over more than £1 billion ($1.36bn) in debts and he faces extradition to India on accusations of money laundering and fraud.

The UK's high court seized £3.2m of his assets from the sale of one of his properties in Cannes, France, to be used to cover legal fees.

Mr Mallya had applied to access £2.7m of the funds to pay for legal fees and living expenses, but Judge Nigel Barnett, sitting at London's Insolvency and Companies Court, has permitted him access to only £1.2m of the funds.

As part of his claim, Mr Mallya had requested £22,500 a month for his living expenses, which the banks’ legal team described as an “eye-watering” amount.

The respondent’s lawyer, Tony Beswetherick, said Mr Mallya should "cut his cloth" according to his means and told the court it “should not authorise unreasonable expenditure”.

“No breakdowns or other materials have been provided to justify the claim,” he said.

“Mr Mallya has not been forthcoming as to his assets and income and whether there are other sources from which he could fund the payments.

“On the evidence, there is no justification for depleting assets in the court's control.”

Mr Mallya, 65, is accused of defaulting on $1.3 billion in loans for his failing airline Kingfisher that closed in 2012.

He has allegedly refused to repay the loans despite having the money to do so.

The court previously heard that the former Formula One boss, the self-styled King of Good Times, was one of India’s wealthiest men and was described by a British judge as a “glamorous, flashy, famous, bejewelled, bodyguarded, ostensibly billionaire playboy”.

In the latest court hearing, Judge Barnett granted him access to less than half the held funds he requested and refused the rest of his application.

He permitted Mr Mallya to take £121,000 for six months of living expenses and said it would not be practical during the pandemic to force him to sell luxury items, such as the two boats and two cars, which are presently in storage, to fund himself.

“I am satisfied that the Court Funds Office Monies are the most appropriate source for payment of the transactions that have already been validated and I propose to order accordingly,” he said.

But he refused permission for a further £1.5m of the funds to be used to cover the cost of Mr Mallya’s other legal battles, including his failed extradition fight, his criminal proceedings in India and litigation with British drinks company Diageo.

Later this year the banks will be returning to the high court to seek a bankruptcy order after a debt judgment against him.

Mr Mallya set up Kingfisher airline in 2005 but fled to the UK in 2016 after being accused of misusing loans for the ailing business 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.

He has denied wrongdoing and blames the global financial crisis for the collapse of his business empire.