Jet Airways founder diverted bank loan funds to buy property overseas: Report

Jet Airways founder diverted bank loan funds to buy property overseas: Report

Jet Airways founder Naresh Goyal, arrested in a Rs 538-crore bank fraud case, allegedly siphoned off bank loan funds to purchase property overseas

Jet Airways founder Naresh Goyal, who was arrested on Friday, allegedly connived with other accused and cheated Canara Bank by siphoning off bank loan funds with the help of its subsidiaries and showing bogus expenses, the Enforcement Directorate (ED) said. He also acquired various properties overseas, including Dubai and the UK, using the funds, according to the probe agency.

The ED said Naresh Goyal illegally diverted the loan proceeds as indicated by Ernst & Young's Forensic Audit Reports, causing a loss of Rs 538.62 crore to the bank.

ED investigators found that Naresh Goyal had booked dubious expenditures of Rs 1,000 crore as professional and consultancy expenses. These expenses included personal expenses of himself and his family members, as well as unaccounted transactions credited to the foreign accounts of the promoters.

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

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The total exposure of JIL was around Rs 6,000 crore from the State Bank of India-led consortium, the probe agency said.

Agreements were made with several General Selling Agents (GSAs) where relatives of Naresh Goyal and Anita Goyal were directors. Out of over Rs 3,000 crore paid as GSA expenses, a substantial portion of it was made to Jet Air LLC, Jet Air UK Limited, Jetair Pvt. Ltd. and Jetair INC. Naresh Goyal is a 15 per cent shareholder in Jetair LLC, Dubai.

On July 19, ED officials had conducted searches 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.

The probe agency collected a large amount of incriminating documents and summoned Naresh Goyal on two occasions, but failed to appear before it.

Also, in his statement to the ED, Amit Agarwal, the ex-CFO of Jet Airways, implicated Naresh Goyal's secretary, Jennifer D'Silva, for approving payments to suspicious consulting and professional firms with Naresh Goyal’s approval and no consultation with Jet Airways' finance department.

On scrutiny of the audit report of Ernst & Young, it was disclosed that a sum to the tune of Rs 9.46 crore was paid to Naresh Goyal's wife Anita, daughter Namrata and son Nivaan from the accounts of JIL in 2011-2012 and 2018-2019 for various purposes.

When Naresh Goyal was the Jet Airways chairman, the firm diverted funds by way of making advances to JIL's subsidiary Jet Lite Limited (JLL) worth Rs 2,547.83 crore and subsequently wrote off the same by making provision.

The ED summoned Goyal twice, on August 17 and August 30. They demanded that he produce documents related to the acquisition and utilisation of considerable wealth in the form of loans.

Naresh Goyal irresponsibly evaded these summons on flimsy grounds, displaying clear disdain towards the legal process, the probe agency said.

Frustrated by his non-compliant attitude, ED officials, on September 1, issued a fresh summons and took his statement at his Delhi home. The probe agency reiterated its demand for the documents, stressing that sufficient time had passed since their initial request.

When queried about his continual absence before the ED authorities during previous summons, Naresh Goyal remained elusive in his answers, further obstructing the investigation process.

Subsequently, he was arrested and a special PMLA court in Mumbai remanded Naresh Goyal in ED custody till September 11.

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