• Order strenghtens efforts to get Mallya back from London
  • Tycoon facing cases in India over repayment of bank loans

A special Indian court on Tuesday declared former billionaire Vijay Mallya a proclaimed offender in a loan case, a federal investigation body said, in a move that paves the way for banks to take over his properties.

The ruling follows an application by the Enforcement Directorate, a federal body that probes violation in foreign transactions, accusing Mallya, 60, of diverting some funds from loans to buy property abroad. The agency, which tweeted about Tuesday’s court order, is seeking to extradite the beer baron who has been labeled a fugitive by India after he left for the U.K. early this year without paying more than $1 billion owed by Kingfisher Airlines Ltd. the carrier he founded.

“Persons harboring a proclaimed offender are also considered guilty and this verdict makes it simpler to seize assets,” said Hitesh Jain, a Mumbai-based lawyer with ALMT Legal Partners. “Of course, today’s verdict makes a stronger case for his extradition.”

Mallya, ranked the 45th-richest Indian with a net worth of $1 billion by Forbes in March 2012, has become the poster boy of bad debt and alleged financial irregularities in India. Banks that have lent to the businessman have approached the court to get his passport suspended even as opposition parties accuse Prime Minister Narendra Modi of going soft. Mallya, who serves as chairman of UB Group, denies wrongdoing in both cases.

Sumanto Bhattacharya, a spokesman for Mallya and UB Group, said he doesn’t have an immediate comment on the court order. In a statement on June 12, Mallya said no summons were issued to him in the case, and he “cannot understand” the move to declare him a “proclaimed absconder.”

Mallya has refused to return to India and said that he fears an unfair trial amid the “media frenzy and hysteria” over unpaid dues. Modi’s administration has asked the U.K. to deport him and is seeking legal advice on an extradition. Both require evidence of fraud, however, and it’s unclear if India can make the case.

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