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Jet Airways founder Naresh Goyal sent to ED custody till September 11

Jet Airways (India) Limited’s founder-chairman Naresh Goyal, on September 2, was sent to the ED’s custody till September 11 in connection with an alleged loan fraud estimated to be around ₹538.62 crore of Canara Bank.

The Central agency arrested Goyal on September 1 after he was summoned to the Mumbai office for recording his statement. He was produced before the Special Prevention of Money Laundering Act (PMLA) court on September 2. The ED sought his custody for 14 days.

The ED probe is based on a case registered by the CBI in May. Among those named as accused were the company, Goyal, his wife Anita Naresh Goyal and Gaurang Ananda Shetty.

The FIR alleged that since August 2018, the company started claiming that it had been facing liquidity and operational issues, and was not able to service the payment or repayment obligations. In October 2018, the lenders decided to invoke the inter-creditor agreement provisions and the State Bank of India was appointed the leader.

Jet Airways was told to submit a resolution plan and infuse ₹3,500-₹4000 crore. However, the conditions were not fulfilled and the company also defaulted on payment of instalments as on December 31, 2018. The banks then took the matter to the National Company Law Tribunal. In April 2019, Jet Airways had suspended its operations.

The Canara Bank said its loan account turned a non-performing asset on June 5, 2019. A forensic audit of the company’s financials during the check period from April 1, 2011 to June 30, 2019, subsequently detected alleged diversion and siphoning of funds.

The bank also alleged that Jet Airways was transferring borrowed funds to subsidiary/group entities through various ways. During the review period, ₹1152.62 crore was paid for professional and consultancy services. Of these, alleged suspicious transactions worth ₹197.57 crore were detected in case of the linked entities.