Canara Bank fraud: ED attaches assets worth Rs 538 crore off Naresh Goyal & family

Jet Airways, once a prominent player in the Indian aviation industry, has seen its founder and former chairman Naresh Goyal embroiled in a growing legal battle.

In a massive action, the Enforcement Directorate (ED) on Wednesday, 1 November, said that it has attached properties worth Rs 538 crore from the now-defunct airline's founder Naresh Goyal, his wife Anita Goyal and son Nivaan Goyal.

The action comes a day after the ED filed a chargesheet in the Canara Bank fraud case, naming the Goyal couple and four Jet companies — Jet Airways (India) Ltd (JIL), Jetair Pvt Ltd, Jet Enterprises Pvt Ltd and Jet Airways LLC, Dubai.

The properties are situated in London, Dubai and various states of India.

The ED, in a statement, said that it has attached properties worth Rs 538.05 crore under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA), in its investigation against JIL.

'The attached properties include 17 residential flats and bungalows and commercial premises in the name of various companies and persons,' the ED statement said.

The probe, it said, had revealed that JIL siphoned off loans from a consortium of banks led by the State Bank of India (SBI) and Punjab National Bank (PNB).

'Naresh Goyal implemented a massive financial fraud in which the funds of JIL were systematically diverted (under) the garb of irrational and inflated general sales agent (GSA) commissions, large unexplained payouts to various professionals and consultants, by granting of loans to JetLite Ltd (100 per cent subsidiary to acquire Air Sahara), and subsequently writing off the loans by making provisions in the balance sheets,' the agency alleged.

It said that its probe has established that commissions were wrongfully paid to GSAs of JIL and Jet Airways LLC, Dubai for 'operational expenses'.

"All these GSAs were beneficially owned by Naresh Goyal. Hence, the management of JIL toed the line of Naresh Goyal (sic), and kept on paying large sums of money on (a) regular basis despite the fact that these entities were not performing any substantial service after 2009. The funds so received were again used by Naresh Goyal and his family for their personal expenses and investments," the ED said.

The chargesheet claimed that Naresh Goyal was blatantly siphoning off funds from JIL, which had already become a loss-making entity for a long time.

Goyal drained JIL of funds and infused that money into related entities which were personally owned by his family members, both in India and abroad, without any financial rationale, the chargesheet said.

It also mentioned that his family was living an 'ultra-luxurious life' and receiving 'obnoxious' amounts of funds from JIL indirectly, without contributing anything to JIL.

The ED's complaint also claims that Naresh Goyal has created foreign trusts and is holding expensive assets abroad. It added that Goyal has been totally non-cooperative and evasive during its investigation.

Earlier, the financial probe agency had conducted searches and surveys at premises linked to Goyal, at JIL's chartered accountants', and others.

Jet Airways was once a leading airline in India, but ceased operations in April 2019 due to financial troubles.

Founder Naresh Goyal's 'resistance' to diluting his stakes and 'incessant siphoning off of funds for personal pecuniary gains' led to the downfall of the airline, the Enforcement Directorate chargesheet states.

The ED claimed that the airline could have survived had Goyal kept aside his 'ulterior motive' and allowed professionals to make quick and strategic decisions to change the operating cash flow of the company.

The ED's case is based on an FIR registered by the Central Bureau of Investigation (CBI) on a complaint submitted by Canara Bank, following which Naresh Goyal was arrested on 1 September.

The ED's allegations could have far-reaching consequences, including potential legal action against other key individuals associated with the airline.

Inputs from PTI and IANS