Jet Airways Founder Naresh Goyal Faces Allegations of Rs 1,000 Crore Money Laundering

Dubious and personal expenses totaling Rs 1,000 crore were reportedly made from bank-loan funds for Jet Airways founder Naresh Goyal and his family members. This revelation has come to light as the Enforcement Directorate (ED) takes action in a money-laundering case involving the businessman.

Goyal, aged 74, was taken into custody late on Friday night after the federal probe agency transported him from Delhi to its Mumbai office. A special court, designated for cases under the Prevention of Money Laundering Act (PMLA), has remanded him to ED custody for ten days, extending until September 11. The ED has stated that the total non-performing assets (NPAs) of Goyal’s group, Jet Airways (India) Limited (JIL), stand at Rs 5,951.46 crore. The State Bank of India (SBI) holds the largest share of these NPAs, amounting to Rs 1,636.23 crore among a consortium of nine banks exposed to the company and its promoters.

Unveiling Dubious Expenses

The ED’s investigation has unveiled that, under the guise of professional and consultancy services, dubious expenses amounting to Rs 1,000 crore were recorded. Personal expenses of Naresh Goyal and his family members were also charged to the company, along with unaccounted transactions directed to foreign accounts linked to the promoters.

JIL allegedly diverted funds to overseas entities situated in tax havens such as Dubai, Ireland, and the British Virgin Islands. These funds were funneled under the pretext of general selling agents’ commissions, payments made to related parties and entities associated with Goyal and his associates.

The agency has also reported that Goyal was summoned on two occasions following raids in July but failed to appear. Jet Airways, a full-service carrier, ceased its operations in April 2019 due to financial constraints, prompting Goyal to step down as the chairperson of the airline.

The ED’s Case and Its Origins

The ED’s case, filed under the criminal sections of anti-money laundering laws, originates from an FIR filed by the Central Bureau of Investigation (CBI) against Jet Airways, Naresh Goyal, his wife Anita, and some former company executives. The FIR relates to an alleged Rs 538-crore fraud case at Canara Bank.

In July, the ED conducted raids against Goyal, chartered accountants (CAs), consultants who received substantial payments from JIL over the years (which were red-flagged in forensic audit reports), and other individuals involved in the case.

The CBI FIR was lodged based on the bank’s complaint, claiming that it had sanctioned credit limits and loans to JIL amounting to Rs 848.86 crore, with Rs 538.62 crore remaining outstanding. On July 29, 2021, the account was declared as “fraud” by the bank. A forensic audit of JIL allegedly revealed that it paid “related companies” Rs 1,410.41 crore out of the total commission expenses, effectively diverting funds.

Furthermore, personal expenses, such as staff salaries, phone bills, and vehicle expenses, of the Goyal family were reportedly paid by JIL. Forensic audits also indicated that funds were siphoned off through Jet Lite (India) Limited (JLL) through advance payments and subsequent write-offs.

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