ED arrests Jet Airways former chief for cheating Canara Bank of Rs 538 crores

Hyderabad: The Directorate of Enforcement (ED) arrested Naresh Goyal, ex-chairman of Jet Airways (India) Limited on September 1 under the provisions of the Prevention of Money Laundering Act (PMLA), 2002 in the Rs 538 crores Canara Bank fraud case.

ED initiated an investigation on the basis of an FIR registered by CBI BS&FB, New Delhi, against Jet Airways (India) Ltd (JIL), Naresh Goyal and others, alleging offences of cheating, criminal conspiracy, criminal breach of trust and criminal misconduct committed by them.

Jet Airways, a full-service carrier, shut its operations in April 2019 after running out of cash. Goyal subsequently stepped down as the chairperson of the airline.

In the FIR, it is alleged that Naresh Goyal in connivance with the other accused persons cheated Canara Bank by siphoning off bank funds with the help of its subsidiaries by showing bogus expenses, and illegally diverting the loan proceeds as indicated by E&Y’s forensic audit reports and thereby caused a loss to the tune of Rs 538.62 crore to Canara Bank.

ED had conducted searches on July 19 at multiple locations, including the chartered accountants and consultants to whom large payments had been made by JIL over the years and which were red-flagged in the forensic audit reports. ED collected large amounts of incriminating documents and Naresh Goyal was summoned on two occasions, but failed to appear before ED.

The ED investigation revealed that in the garb of professional and consultancy, dubious expenses to the tune of Rs 1,000 crore were made. Even the personal expenses of Naresh Goyal and his family members were made in the company’s name and unaccounted transactions have been credited to the foreign accounts of the promoters.

JIL has also diverted funds to overseas entities based in Dubai, Ireland and other tax haven countries including the British Virgin Islands, in the garb of the General Selling Agents commission, which was paid to related parties and the entities connected to Naresh Goyal and his associates.

Naresh Goyal was produced before the special court set up to deal with cases lodged under the PMLA. He was sent to the ED’s custody for 10 days.