By Poonam Joshi
London [UK], December 08 (ANI): An expert witness called by Vijay Mallya's defence team on Thursday described as "superficial" the processes employed by banks to grant loans totalling more than Rs 2,000 crore to now-defunct Kingfisher Airlines in 2009.
Paul Rex, a London-based banking expert called in by Mallya's defence team, made the comment in response to a question by the prosecutions' Mark Summers, who was questioning Rex about the credit analysis done by IDBI Bank, State Bank of India and other institutions.
The Indian government, through Britain's agency Crown Prosecution Service (CPS), has been contending in the court that liquor baron had misled banks back home with regard to his company's net worth while seeking loan totalling around Rs 2,000 crore.
In reports submitted to court prior to the trial, Rex had compiled a list of "failures and irregularities" on the part of the banks in evaluating the credit-worthiness of Kingfisher Airlines.
He said that there were "glaring gaps" in the credit analysis process.
On further questioning, Rex revealed more details about the shortcomings of the banks in the loan approval process.
He said IDBI, for instance, relied on information that was "largely insufficient" and merely "reproduced" information provided by Kingfisher to other banks in the consortium which provided the loans.
Rex added that this was all done with the approval of senior management.
In a follow up question, Summers asked Rex whether Kingfisher or Mallya had a "responsibility" to notify the banks about any shortcomings or whether it was "dishonest" on the part of Mallya and Kingfisher to disclose the updated information, particularly in relation to business plans and profit projects.
Rex responded: "It is a matter for the Indian courts to decide on any dishonesty on Mallya's part. For example, if you provide a document to a bank with a valuation of the company with certain provisos, it is the job of the bank's analysts to verify the information, it is not the responsibility of the borrower."
On Monday, the court will hear from Margaret Sweeney on payments made to the Force India Formula One team following the collapse of Kingfisher Airlines.
The court will also hear from Martin Lau, Professor of South Asian Law at the School of Oriental and African Studies (SOAS) in London. (ANI)
This story has not been edited. It has been published as provided by ANI