In a significant development, Naresh Goyal, the founder of Jet Airways, was arrested late on Friday night by the Enforcement Directorate (ED) in Mumbai. Goyal was brought from Delhi to face questioning in connection with the alleged defrauding of Canara Bank to the tune of Rs 538 crore.This arrest comes after Goyal was summoned twice in connection with the case and failed to appear before the ED.
Finally, the ED team escorted him to their Mumbai office, where he underwent rigorous questioning for eight hours before his arrest at 11:00 PM. Reliable sources indicate that Naresh Goyal was transported from Delhi to Mumbai by an ED team on Friday, arriving in Mumbai around 2 PM. His arrest took place at 11 PM after extensive interrogation at the ED office in Worli. He is scheduled to be produced in the PMLA court for remand.
The ED officials are probing alleged account irregularities, the diversion of a portion of the loan amount to related companies as commission, and money laundering. They are also seeking information related to seized documents pertaining to fund transactions.The Enforcement Directorate had conducted searches at eight locations in Mumbai and Delhi back in July 2023, as part of a money laundering case involving Rs 538 crore.
This case stems from a May 3 First Information Report (FIR) filed by the Central Bureau of Investigation (CBI), naming Jet Airways (India) Limited (JIL), Naresh Goyal, his wife Anita, former company executive Gaurang Ananda Shetty, and others as accused in connection with the alleged fraud at Canara Bank. Notably, the CBI was already investigating a case against Goyal.
Goyal Arrested Over Defrauding Canara Bank Of ₹538.62 crore
The ED's money laundering case is based on the FIR filed by the CBI, which accuses Goyal of criminal conspiracy, criminal breach of trust, and criminal misconduct leading to a wrongful loss of ₹538.62 crore for the bank. Canara Bank alleges that it extended a credit limit facility to Jet Airways, but the airline defrauded the bank of Rs 538.62 crore. It claims to have provided credit limits and loans totaling Rs 848.86 crore to Jet Airways, with Rs 538.62 crore remaining outstanding. The airline is accused of diverting a portion of the loan to related companies in the form of commissions.
A forensic audit of the company uncovered fraudulent transactions, including fund diversions from the loan amount. Expenses listed as paid commissions to related companies were found to 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 from April 1, 2011, to June 30, 2019.
These entities had turnovers similar to the expense amounts recorded by Jet Airways under the guise of professional and consultancy expenses.
The complaint further alleges that Jet Airways (India) Ltd (JIL), promoted by Tail Winds Ltd, an overseas company owned by Goyal and his associates, had been dealing with Canara Bank since 2005. However, due to liquidity and operational issues since August 2018, the accounts turned non-performing assets (NPA) in 2019.A forensic audit conducted by EY revealed that JIL had paid ₹1,410.41 crore to related parties as part of total commission expenses.
Additionally, JIL had paid ₹403.27 crore to general selling agents (GSA), which was not in line with the GSA agreement.The complaint also alleges that funds were siphoned off through Jet Lite (India) Ltd (JLL), a subsidiary, by way of making advances and investments, which were subsequently written off. Funds amounting to ₹2,547.83 crore, transferred by JIL to JLL as a loan, were never repaid. Furthermore, over ₹400 crore was allegedly siphoned off through payments made under the guise of professional and consultancy expenses.