Jet Airways Founder Naresh Goyal Arrested by ED in Rs 538 Crore Bank Fraud Case
On July 19th of this year, the Enforcement Directorate (ED) carried out search operations involving Naresh Goyal and other individuals as part of their investigation under the Prevention of Money Laundering Act (PMLA).
On Friday (01-09-2023), the Enforcement Directorate (ED) made the arrest of Naresh Goyal, the founder of Jet Airways, in connection with an alleged fraud case involving Rs 538 crore at Canara Bank, according to officials.
Mr. Goyal, aged 74, was apprehended under the Prevention of Money Laundering Act (PMLA) after undergoing several hours of questioning by the central agency earlier in the day.
It is expected that Mr. Goyal will be presented before a special PMLA court in Mumbai on Saturday, where the ED will likely request his custody.
This development comes as part of an ongoing investigation by the Central Bureau of Investigation (CBI), which is looking into Mr. Goyal, his wife Anita, and some former company executives in relation to the fraud case.
In July, the Enforcement Directorate (ED) also conducted raids at various locations in Delhi and Mumbai connected to Naresh Goyal and his close associates.
The Central Bureau of Investigation (CBI) initiated an FIR on this matter back in May of this year.
The CBI initiated its FIR based on a complaint from Canara Bank, which claimed that it had approved credit limits and loans amounting to Rs 848.86 crore for Jet Airways (India) Limited (JIL), with Rs 538.62 crore still unpaid. Jet Airways has since ceased operations, and the CBI declared the account as “fraudulent” on July 29, 2021.
According to Canara Bank, they had granted a credit facility to Jet Airways, but the airline deceived the bank by misappropriating Rs 538.62 crore.
The bank stated that it had extended credit limits and loans of Rs 848.86 crore to Jet Airways, with Rs 538.62 crore remaining unpaid. The airline diverted a portion of the loan to affiliated companies as commission.
A forensic audit of the company uncovered fraudulent transactions that involved diverting funds from the loan amount. Expenses that were listed as paid commissions to affiliated companies actually encompassed costs associated with the Goyal family and other individuals implicated in the scheme.
The airline had previously reported expenditures totaling Rs 11,152.62 crore under professional and consultancy expenses, of which Rs 197.57 crore of these transactions were flagged as suspicious during the investigation into the company’s financial records spanning from April 1, 2011, to June 30, 2019.
These entities had turnovers comparable to the expense amounts documented by Jet Airways, all under the guise of professional and consultancy expenses.
