Jet Airways founder Naresh Goyal under ED custody in money laundering case
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Mumbai: The Enforcement Directorate (ED) arrested Jet Airways founder Naresh Goyal on Friday in connection with an alleged money laundering case associated with the Rs 538-crore Canara Bank loan fraud. Goyal's arrest came after seven hours of intense questioning by ED officials.
The founder of the now-defunct Jet Airways will be produced before the special Prevention of Money Laundering Act (PMLA) court on Saturday to face charges related to money laundering and financial irregularities.
In July of this year, the ED had conducted searches at eight locations in Mumbai and Delhi as part of its ongoing investigation into the case.
The case against Naresh Goyal stems from a May 3 case filed by the Central Bureau of Investigation (CBI) regarding the alleged loan fraud involving Canara Bank. Jet Airways had maintained a financial relationship with Canara Bank since 2005, with all exposures to the company being managed under a consortium led by the State Bank of India.
According to Canara Bank's complaint, when Goyal's companies began defaulting on their loan repayments to the consortium, the bank initiated a forensic audit to scrutinize all transactions and documentation from April 1, 2011, to June 19, 2019. The forensic audit, submitted on February 10, 2021, uncovered "glaring irregularities."
The CBI, based on the audit report, alleges that the accused companies were involved in fraudulent activities, including the diversion and siphoning of funds. These misappropriated funds were reportedly used for various purposes, such as commission expenses and personal expenses like salaries for the Goyal family, phone bills, and vehicle expenses, all paid by Jet Airways (India) Ltd.
Additionally, the forensic audit revealed that funds were siphoned off through Jet Lite (India) Ltd via advances and investments, which were later written off. It is alleged that the company diverted funds by making transfers to its subsidiary, Jet Lite (India) Ltd, in the form of loans, advances, and investments.
The CBI has stated in its FIR that "all the transactions point towards cheating and misappropriation of funds by the borrower and siphoning of funds borrowed from banks being utilized for purposes unrelated to the operations of the borrower."