The SFIO case against Kingfisher and others (a total of nineteen accused persons/ entities) involved allegations that Kingfisher Airlines sought to acquire low-cost air carrier Deccan Air without meeting eligibility conditions for such acquisition and at a time when Kingfisher was facing losses of about ₹1,234 crores.
The SFIO claimed that the acquisition was sought to be carried out to secure potential capital gains and fraud was played to avoid tax on such capital gains and to dupe investors of Deccan Air.
Kingfisher was accused of creating artificial ‘demerged’ entities to carry out a merger with Deccan Air to avoid the capital gains tax. Among other allegations, Kingfisher was also alleged to have used the brand value of the resultant merged entity to secure additional finance.
Kingfisher chairman Vijay Mallya was alleged to have orchestrated these activities along with others accused.
The others accused included AK Ravi Nedungadi, a director of Kingfisher Airlines and Group CFO of United Breweries (which markets Kingfisher beer), A Harish Bhat (treasurer of United Breweries), A Raghunathan (Chief Financial Officer of Kingfisher Airlines), Bharath Veeraraghavan (Company Secretary of Kingfisher Airlines), Captain R Gopinath (founder of Deccan Air), several valuers and even the-then Executive Vice President of SBI Capital Markets Ltd., Supratim Sarkar.
In 2018, a Special Court in Bengaluru issued arrest warrants against Mallya and others. The accused then approached the High Court with writ petitions challenging the issue of arrest warrants and the SFIO proceedings against them. It may be noted that Mallya was not among those who filed the writ petitions.
Source: Barandbench
