Mallya Look-Out Circular: Many Disparities in the CBI’s Actions

While Mallya was leaving India on 2 March, CBI Director was boasting of a probe against Kingfisher in a conference.

Even as liquor baron Vijay Mallya was leaving India on 2 March, the CBI Director, Anil Sinha, was boasting of his prompt action against Kingfisher Airlines in the cases against the carrier for bank fraud. In a conference organised by the Indian Bank Association in Mumbai, Sinha flagged banks for their complacency and the CBI’s promptness, especially in the Mallya case. Here is the gist of his speech.

CBI has recently registered a case of cheating and fraud against Kingfisher and its erstwhile Management involving allegations of defrauding Banks to the tune of nearly Rs 7,000 crore. This case was registered in July 2015, but the loans/advances were taken between 2004 to 2012. However, despite our repeated requests, the banks did not file a complaint with CBI. We had to register the case on our own. I recently read a newspaper report that now one of the banks has declared it as a willful default. The question is that the undue delay in identifying and reporting such a fraud has jeopardised the cause of justice to the offenders’ benefit, giving them the opportunity to divert funds and destroy evidence.  

Anil Sinha, Director, CBI on 2 March

If Sinha was aware of Mallay’s transgressions, why did he choose to register the corruption case against the liquor baron for Rs 900 crore and not Rs 7,000 crore? Why couldn’t Sinha act suo motu for the other aggrieved, banks just like he did for IDBI Bank?

Inconsistencies in the CBI’s Declarations and Actions

The agency has been on the backfoot in the Mallya case ever since it hit the headlines. The reason is best known to the agency. CBI officers have been leaking incoherent trickles of information to mislead the media.

CBI’s stance on the Look-Out Circular (LOC) became rather confusing over the past few days.

Inconsistency 1

The investigators initially hid the fact that a look-out circular was issued by the agency to keep track of Mallya. After much prodding, on Wednesday, the agency spilled some half-truth saying that a look-out circular had been issued. But it didn’t clarify the nature of the circular and rather implied a fault in the system leading to Mallya’s departure to another foreign country.

Inconsistency 2

On Thursday, it was found that the CBI had issued a Look-Out Circular instructing all airports in India to intimate the agency if Mallya is leaving the country and not to detain or stop him. So it was not the Bureau of Immigration’s mistake, the mild circular gave Mallya easy passage to a foreign land.

Inconsistency 3

But the drama doesn’t end here. By late Thursday evening, the media got another surprise. IB sources revealed that the circular issued by the CBI on 16 October 2015 was to detain Mallya if at all he leaves the country. The CBI itself later revised the circular in November to just intimation.

The agency is yet to clarify why the circular was revised. Was it pressure, political or otherwise, that forced the agency to tone down the circular?

Now, as a face-saving tactic, the CBI Director is questioning his juniors why the circular against Mallya was revised. Is it possible that such a far-reaching decision on such a high-profile case is taken without the knowledge of the top CBI official?