One of the most famous names in Indian aviation, Jet Airways founder Naresh Goyal, was arrested late last night by India’s financial crimes watchdog Enforcement Directorate (ED) for his links to bank fraud amounting to INR 538 crore (INR 5,380 million).
Goyal, 74, was taken into custody by ED in a money laundering case linked to an alleged bank fraud of INR 538 crore at Canara Bank, official sources said. He was arrested under the Prevention of Money Laundering Act (PMLA), following a long session of questioning at the central agency’s office in Mumbai.
He was expected to be produced before a special PMLA court in Mumbai today where the ED would seek his custodial remand, the sources said.
Jet Airways, a full-service carrier and once one of the top airlines in India, had shut its operations in April 2019, after running out of cash. Later, Goyal stepped down as chairperson of the airline.
The money laundering case stems from an FIR of the Central Bureau of Investigation (CBI) against Jet Airways; Naresh Goyal; his wife Anita; and some former company executives in connection with the alleged INR 538 crore fraud at Canara Bank.
ED had carried out raids against Goyal and others involved in the case in July. The CBI FIR was registered on the bank’s complaint, which alleged that it had sanctioned credit limits and loans to Jet Airways (India) Ltd (JIL) to the tune of INR 848.86 crore, of which INR 538.62 crore was outstanding. The CBI had said that the account was declared “fraud” on July 29, 2021.
The bank alleged that the forensic audit of JIL showed that it paid “related companies” INR 1,410.41 crore out of a total commission expenses, thus siphoning off funds from JIL. “As per sample agreement of Jet Airways (India) Ltd (JIL), it was noted that the expenses of General Selling Agents (GSA) was to be borne by GSA itself and not by JIL. However, it was observed that JIL has paid various expenses amounting to INR 403.27 crore which is not in tune with the GSA,” alleged the complaint, now part of the CBI FIR.
It said that 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.