The start of Mallya's extradition hearing was delayed by 70 minutes because of the emergency evacuation at Westminster Magistrates Court, leaving the 61-year-old businessman and former politician to mingle with the media outside.
Television crews from India pursued him until he briefly proclaimed he had done nothing wrong.
"The allegations are baseless, unfounded, deliberate, and you will see our submissions in court," Mallya said.
Reporters kept circling him on the sidewalk.
"The answer will be given to the judge. You think you are going to conduct a trial by media?" he asked.
Once the court's emergency alarm stopped, lawyers for the Indian government started presenting a complex case against Mallya in support of the extradition request.
Mark Summers, presenting India's case on behalf of Indian prosecutors, described Mallya's attempt to prop up his ailing Kingfisher Airlines with bank loans in 2009 despite the carrier's dire financial straits.
"It was an airline in trouble at this stage, seeking financial assistance from a large number of banks and a large amount of money," Summers said.
Summers indicated the government plans to show that loans totaling hundreds of millions of dollars were misused. Indian officials have said Mallya is deeply in debt.
Kingfisher Airlines eventually defaulted on the loans. Summers said there were reasons to believe that was Mallya's intent all along.
"His company was in intensive care. The market was in intensive care. It was heading in only one direction," Summers said. "The defendant had a choice: Either you take those losses on yourself and impinge on your own lifestyle, or you try and palm it off on a bank."
Mallya, wearing a well-tailored suit and freshly barbered hair, sat impassively in the dock as the case against him was presented. His lawyer asked the judge to allow the entrepreneur to be seated inside the courtroom instead of the glass-enclosed dock, but the request was denied.
Scotland Yard's extradition unit arrested Mallya in response to a request from the Indian government.
Mallya launched Kingfisher Airlines in 2005, but it ran into trouble as it expanded. The Indian government suspended the airline's license in 2012 after it failed to pay pilots and engineers for months.
The extradition hearing is expected to take roughly two weeks and lead to a verdict on whether Mallya will be sent back to India or allowed to remain in Britain.
The tycoon will have the right to a further appeal if he loses his bid to remain in the United Kingdom.
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