Jet Airways Founder Naresh Goyal Arrested in Alleged Rs 538 Crore Canara Bank Fraud

The Enforcement Directorate (ED) has made a significant development in the ongoing investigation into the alleged Rs 538 crore Canara Bank fraud case. On Friday, ED officials arrested Jet Airways founder Naresh Goyal, aged 74, under the Prevention of Money Laundering Act (PMLA). This arrest follows hours of questioning by the central agency earlier in the day.

Goyal is now expected to be produced before a special PMLA court in Mumbai on Saturday, where the ED will seek his custodial remand.

Continuation of the Probe

This latest development comes in the wake of an ongoing investigation by the Central Bureau of Investigation (CBI) against Naresh Goyal, his wife Anita, and some former company executives in connection with the fraud case. In July, the ED had conducted raids at multiple locations in Delhi and Mumbai related to Goyal and his close associates.

The CBI had filed an FIR in May this year based on Canara Bank’s complaint, alleging that it had sanctioned credit limits and loans to Jet Airways (India) Limited (JIL) amounting to Rs 848.86 crore, with an outstanding amount of Rs 538.62 crore.

Canara Bank’s Allegations

Canara Bank, in its complaint, asserted that it had extended a credit limit facility to Jet Airways, which allegedly defrauded the bank of Rs 538.62 crore. The bank had provided credit limits and loans totaling Rs 848.86 crore to Jet Airways, with Rs 538.62 crore remaining outstanding.

What raised suspicions was the airline’s diversion of a portion of the loan to related companies in the form of commissions. A forensic audit of the company’s financial records revealed fraudulent transactions involving fund diversion from the loan amount.

Fictitious Expenses and Fund Diversions

Expenses that were listed as paid commissions to related companies were found to actually include costs related to the Goyal family and other individuals involved in the scam. Jet Airways had reported spending Rs 11,152.62 crore on professional and consultancy expenses, with Rs 197.57 crore of those transactions deemed suspicious during the investigation into the company’s financial records covering the period from April 1, 2011, to June 30, 2019.

These related entities had turnovers similar to the expense amounts recorded by Jet Airways under the guise of professional and consultancy expenses.

Key Details
Bank’s Allegation Loan Amount Outstanding Amount
Canara Bank’s Complaint Rs 848.86 crore Rs 538.62 crore

The arrest of Naresh Goyal marks a significant development in the case, and the ED’s decision to seek his custodial remand underscores the seriousness of the allegations against him and the need for a thorough investigation.

As the investigation continues, more details about the alleged fraud are likely to emerge, shedding light on the extent of financial irregularities within Jet Airways and related entities.

It’s important to note that all individuals are considered innocent until proven guilty in a court of law, and this arrest is part of the due process of the investigation.

We will keep you updated on any further developments in this case.

Source: [source]

Prevention of Money Laundering Act (PMLA)

The Prevention of Money Laundering Act (PMLA) is a crucial piece of legislation in India aimed at combating money laundering and related offenses. Enforced by the Enforcement Directorate (ED), the PMLA empowers authorities to take action against individuals and entities involved in money laundering activities.

Under the PMLA, money laundering is defined as the process of concealing, possessing, acquiring, or using the proceeds of illegal activities as legal funds. The act provides law enforcement agencies with various tools and mechanisms to investigate, seize, and confiscate such proceeds.

Additionally, the PMLA mandates reporting entities, such as banks and financial institutions, to maintain records and furnish information to the ED to assist in identifying suspicious transactions and potential money laundering activities.

The arrest of individuals under the PMLA is typically preceded by a thorough investigation into allegations of financial wrongdoing, with the objective of preventing the flow of illicit funds within the financial system.

It’s important to recognize that the PMLA is a critical tool in India’s efforts to combat financial crimes and maintain the integrity of its financial sector.

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