On Day 4 of Mallya case, all eyes on CBI Director

The fourth day of the defence arguments in India’s efforts to extradite Vijay Mallya from the UK was marked by intense exchanges over the picture portrayed of the CBI and its director, Rakesh Asthana, as well as the Enforcement Directorate, by a London-based political economist, as the prosecution sought to discredit his interpretation of events including through the reliance of media reports, and the Supreme Court verdict on Asthana’s appointment.

The discussion over his appointment and role took place as Asthana sat in the court room, giving yet another dramatic flourish to what has been a complex, and intense hearing beginning last Monday.

Following Monday’s session, where a legal expert sought to link the decision-making process of Supreme Court justices to future appointment prospects, one of the authors of the report wrote to the prosecution rejecting the “defence’s understanding of the paper.”

Lawrence Saez, a professor of the political economy of South Asia at SOAS, testified about what he regarded as the politicisation of the controversy around Mallya by the BJP and Congress as well as the Shiv Sena. He also highlighted criticisms and concerns expressed in India about the CBI and the way it pursues cases, as well as the appointment of Asthana, suggesting that his appointment by the Prime Minister was linked to his pursuance of this particular case.

Political ideology

While Mallya’s political ideology was not the reason for the eagerness of the Congress and the BJP to use the case for political ends, his “prominence” meant that both parties attempted to use the case, blaming each other, he said. The BJP blamed the Congress for the initial disbursement of loans, while the Congress blamed its rival for the waiver of loans and allowing Mallya to leave the country.

Saez also argued that Mallya did not have “exceptional access” at highest political levels, highlighting his use of formal emails and written correspondence rather than direct phone calls to press his case as matters intensified. Ahead of the 2019 elections, the issue of Mallya would “continue to be used for political purposes,” he added.

On the issue of the CBI and it being susceptible to political interference, Saez cited a number of studies including a Supreme Court reference to the CBI as a “caged parrot speaking in its master’s voice.” This was “unfortunately” a perspective “widely acknowledged to be true” in India, he said, adding that the CBI’s independence had fallen over the years.

He also highlighted research conducted between 1988 and 2009 that looked at the correlation between election cycles and the number of corruption cases registered. He said the evidence pointed to the “politicisation of the allegations brought up in those corruption cases.”

He highlighted recent developments in the Rajiv Gandhi assassination case in which a CBI officer testified that evidence from the person who supplied the battery used for the explosive had been deliberately left out, which he said highlighted a “serious breach of protocol.”

In an intense counter-examination, the prosecution sought to cast doubt on the picture portrayed by Saez, with prosecution lead Mark Summers questioning his use or “regurgitation” of media reports, including with regard to the objections to Asthana’s appointment, and the media interpretation of the Central Vigilance Commission’s response to NGO concerns around Asthana’s appointment.

Tuesday’s sessions concluded with further testimony from defence banking expert Paul Rex, who continued to challenge other aspects of the prosecution case, including around the use of negative liens of 12 aircrafts in the loan guarantee agreement, which the government argued amounted to misrepresentation. Rex argued that this would never have represented a very strong security to begin with. He also focussed on his assessment of the personal guarantee offered by Mr. Mallya on the loans, as well as the value of the corporate guarantee offered by UBHL, contesting the assessment from the prosecution that it already had commitments many times its net worth in terms of guarantees. A lengthy discussion also ensued on the use of the funds by Mr. Mallya, and how the disbursed IDBI loan should have been used – and whether a “pressing list” of creditors form February 2009 would still have applied when the loan was disbursed later that year, or would be in a state of flux, as Mr.Rex suggested.

The hearing resumes on Thursday when Dr. Alan Mitchell, a prison expert, provides testimony. A further session is set to take place next week on the admissibility of certain government evidence. Written closing statements will be presented in the New Year.

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