Jet Airways Founder Naresh Goyal Arrested in Rs 538 Crore Money Laundering Case
Linked to Alleged Canara Bank Fraud
The Enforcement Directorate late Friday night arrested Jet Airways founder Naresh Goyal in a money laundering case linked to an alleged bank fraud of Rs 538 crore at the Canara Bank, official sources said.
He was taken into custody under the Prevention of Money Laundering Act (PMLA) following a long session of questioning at the central agency’s office here. Goyal, 74, is expected to be produced before a special PMLA court in Mumbai on Saturday where the ED will seek his custodial remand, the sources said.
Jet Airways, a full-service carrier, had shut its operations in April 2019 after running out of cash. Later, Goyal stepped down as the chairperson of the airline.
The Money Laundering Case
The money laundering case stems from an FIR of the Central Bureau of Investigation (CBI) against Jet Airways, Goyal, his wife Anita, and some former company executives in connection with the alleged Rs 538-crore fraud case at the Canara Bank.
The CBI FIR was registered on the bank’s complaint which alleged that it sanctioned credit limits and loans to Jet Airways (India) Ltd (JIL) to the tune of Rs 848.86 crore of which Rs 538.62 crore was outstanding. The bank alleged that the forensic audit of JIL showed that it paid “related companies” Rs 1,410.41 crore out of a total commission expenses, thus siphoning off funds from JIL.
“As per the sample agreement of Jet Airways (India) Ltd (JIL), it was noted that the expenses of General Selling Agents (GSA) were to be borne by GSA itself and not by JIL. However, it was observed that JIL has paid various expenses amounting to Rs 403.27 crore which is not in tune with the GSA,” the complaint now part of the CBI FIR alleged.
It said personal expenses such as salaries of staff, phone bills, and vehicle expenses among others of the Goyal family were paid by JIL. Among other allegations, it surfaced during the forensic audit that funds were also siphoned off through Jet Lite (India) Ltd (JLL) by way of making advance and investing and subsequently writing off of the same by making provision.
JIL diverted the funds for subsidiary JLL in the form of loans and advances and investments extended.
Previous Case and Quashing
In February, another money laundering case against Goyal, linked to alleged cheating and forgery filed by Mumbai-based Akbar Travels, was quashed by the Bombay High Court after the Maharashtra Police filed a closure report stating it found no substance in the complaint and the dispute seemed to be civil in nature.
As this ED case was based on police FIR and was the predicate offence for filing a money laundering case, it was declared quashed by the high court. A division bench of justices Revati Mohite Dere and Prithviraj Chavan quashed the ECIR (Enforcement Case Information Report or the ED equivalent of an FIR) registered on February 20, 2020, and all proceedings against Goyals on the ground of “being illegal and contrary” to law.
This high-profile case continues to unfold, and the arrest of Jet Airways founder Naresh Goyal is a significant development. Stay tuned for more updates on this ongoing investigation.