India: ED arrests Jet Airways founder Naresh Goyal in money laundering case

Jet Airways founder Naresh Goyal has been arrested by the Enforcement Directorate (ED) in an alleged Rs 538 crore money laundering case linked to Canara Bank, sources said.

Questioning session at ED office Mumbai

Mr Goyal was taken into custody under the Prevention of Money Laundering Act (PMLA), following a long session of questioning at the ED’s office in Mumbai.

Mr Goyal, 74, will be produced before a certain PMLA court in Mumbai on Saturday, where the ED will seek his custodial remand.

The money laundering case stems from a first information report (FIR) of the Central Bureau of Investigation (CBI) against Jet Airways, Mr Goyal, his wife Anita and some former company executives in connection with an alleged Rs 538 crore fraud case at Canara Bank.

The FIR was filed on the bank’s complaint that alleged 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 is tremendous.

The CBI had said the account was declared “fraud” in July 2021. The bank alleged the forensic audit of JIL showed it paid “related companies” Rs 1,410.41 crore out of total commission expenses, thus siphoning off funds from JIL.

The FIR said personal expenses such as salaries of staff, phone bills and vehicle expenses, among others, of the Goyal family were paid by JIL.

It surfaced during the forensic audit that funds were also siphoned off through Jet Lite (India) Ltd (JLL) by making advances and investing and thereafter writing off the same by making provisions.

JIL allegedly hindered the funds for the subsidiary JLL in the form of loan advances and investments extended.

The bank alleged that the higher transactions indicated cheating, misappropriation of funds by the borrower and siphoning of funds borrowed from the bank towards utilisation for purposes inapplicable to the operations of the borrower, to the detriment of the financial health of the entity and/or the lender.

In February, the Bombay High Court had quashed a money-laundering case nestled by the ED against Goyal and his wife based on a Mumbai police case to probe charges of cheating and forgery on a complaint from Akbar Travels.

A division bench of Justices Revati Mohite Dere and Prithviraj Chavan had suppressed the ECIR (Enforcement Case Information Report or the ED equivalent of an FIR) registered in February 2020 and all proceedings against the Goyals on the ground of “being illegal and contrary to law”. The court order came after the police filed a closure report, stating that they had found no significance in the complaint and the dispute appeared to be civil.

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