The probe by Central Bureau of Investigations and Enforcement Directorate has now revealed that businessman Vijay Mallya allegedly diverted most of Rs 6,000 crore borrowed from banks to shell companies.
The money was allegedly diverted to shell companies in seven countries, including the US and UK.
Both the agencies said that evidence gathered so far will strengthen their case for Mallya's extradition from the UK. They will soon file a fresh charge sheet based on these findings, Economic Times reported.
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An official refused to divulge the exact amount laundered by Mallya from the Rs 6,027 crore loan money but said it is huge.
The nation's biggest public sector bank, the State Bank of India, is the leader of the consortium of 17 banks to whom Mallya owes more than Rs 9,000 crore.
Mallya had left the country in March 2016 after public sector banks claimed that he was a loan defaulter and owed an estimated amount of Rs 9,091 crore. They had also approached the Debt Recovery Tribunal.
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The banks also demanded the issue of an arrest warrant against the business tycoon and a security deposit to ensure his presence at the Debt Recovery Tribunal proceedings in Bengaluru.
But Mallya, who was also a member of the Rajya Sabha, left the Indian shores almost six days before the banks approached the court.
Mallya is a billionaire who inherited United Breweries Limited (UB) from his father and turned it around into India's biggest alcohol maker.
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The company which is known for Kingfisher beer, one of the highest selling brands across the world, is no longer his. In addition to this, his airline service Kingfisher Airlines has also now been grounded for five years and has dues of over Rs 9,000 crore to pay to various banks.
The airline was grounded in 2012 after he failed to pay salaries to employees. It is also currently being investigated for suspected diversion of funds and financial irregularities.
"We are in the process of filing a second prosecution complaint. Our investigation into the matter has revealed that loans disbursed by banks to Kingfisher Airlines were diverted by Mallya and his associates to shell companies," an official said.
Mallya has escaped from India despite being asked to return for questioning over the alleged diversion of funds that are yet to be repaid to the banks after the collapse of Kingfisher Airlines.