Quick Take| Vijay Mallya's extradition sends a strong message to economic offenders Mallya's extradition is the culmination of significant structural and fundamental changes by the government to prevent willful defaulters from fleeing the country. Shishir Asthana @moneycontrolcom

Vijay Mallya's extradition is a major victory for the Indian government's efforts in nabbing economic offenders. The Westminster Magistrates' Court has ordered the extradition of the self-proclaimed king of good times, who turned into the king of defaulters.Sure, it may still be too early to celebrate. Mallya now has 14 days to appeal against the order. The extradition will now be referred to the UK Secretary of State.Nonetheless, it's a major victory for the Indian establishment, especially since it comes within days of the extradition of Christian Michel in the AgustaWestland case.

Incidentally, Michel's arrest prompted Mallya to tweet that he was willing to pay the principal amount borrowed by him from the consortium of Indian banks. This was seen as the first signs of Mallya fearing his extradition.More important than getting Mallya back is that the move sends a powerful signal to existing and potential defaulters that they can no longer get away by willfully defaulting on bank loans.Mallya's extradition is the culmination of significant structural and fundamental changes by the government to prevent willful defaulters from fleeing the country.

Foremost among them is clearance of the Fugitive Economic Offenders Bill by the Union Cabinet that deals with those defaulters who escape overseas after committing financial malpractices. The bill empower the government to confiscate properties, including benami assets of absconding corporate defaulters, thereby ensuring that such offenders are brought to book.

The Insolvency and Bankruptcy Code, 2016 has gone a long way in giving teeth to banks to recover money from defaulters.While the government auctioned off Mallya's assets in India to recover some of his dues, his extradition signals that there could be the possibility of banks being able to get their hands on his assets in foreign countries. He has been quoted as saying that the value of his assets in 2018 is far higher than 2016.

Earlier, Mallya had tweeted that he and UB Holding Ltd (UBHL) have filed an application before the Karnataka High Court on June 22, 2018, setting out available assets of approximately Rs 13,900 crore. Mallya owes banks and his employees in Kingfisher Airline a sum of over Rs 9,000 crore.For the government, however, Mallya's extradition is more than recovering the money. Mallya will remain a poster boy, not as a defaulter but as the government's success story in nabbing bad boys. Lalit Modi, Nirav Modi and many of their ilk better watch out now.

First Published on Dec 10, 2018 08:23 pm