Bank-loan funds used for personal expenses of Jet's Naresh Goyal, money sent to tax havens: ED

Dubious and personal expenses of Rs 1,000 crore were made from bank-loan funds for Jet Airways founder Naresh Goyal and his family members even as the airline "diverted" money to some tax havens, the Enforcement Directorate (ED) alleged on Saturday, after arresting the businessman in a money-laundering case.

Goyal (74) was taken into custody late on Friday night after the federal probe agency took him to its Mumbai office from Delhi. A special court set up to deal with cases lodged under the Prevention of Money Laundering Act (PMLA) on Saturday sent him to the ED's custody for 10 days, till September 11.

The agency issued a statement, claiming that the total non-performing assets (NPAs) of Goyal's group -- Jet Airways (India) Limited or JIL -- stood at Rs 5,951.46 crore, with the largest share (Rs 1,636.23 crore) being held by the State Bank of India (SBI) among the consortium of nine banks that had exposure to the company and its promoters.

The ED investigation has found that "in the garb of professional and consultancy, dubious expenses to the tune of Rs 1,000 crore were booked, personal expenses of Naresh Goyal and his family members were booked in the company, and unaccounted transactions credited to the foreign accounts of the promoters".

JIL "diverted" funds to overseas entities based in Dubai, Ireland and other tax havens, including the British Virgin Islands, in the garb of general selling agents' commission, which was paid to related parties and entities connected to Goyal and his associates, the ED has alleged.

The agency has added that Goyal was summoned twice after raids were conducted against him in July, but he "failed" to appear.

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.

The ED case, filed under the criminal sections of the anti-money laundering law, stems from an FIR lodged by the Central Bureau of Investigation (CBI) against Jet Airways, Goyal, his wife Anita and some former company executives in connection with the alleged Rs 538-crore fraud case at the Canara Bank.

The ED carried out raids against Goyal, chartered accountants (CAs) and consultants to whom "large payments" were made by JIL over the years and which were red-flagged in forensic audit reports, and others involved in the case in July.

The CBI FIR was registered on the bank's complaint alleging that it had sanctioned credit limits and loans to JIL to the tune of Rs 848.86 crore, of which an amount of Rs 538.62 crore was outstanding. The CBI had said the account was declared "fraud" on July 29, 2021.

The bank alleged that a forensic audit of JIL showed that it paid "related companies" Rs 1,410.41 crore out of the total commission expenses, thus siphoning off funds.

It said personal expenses, such as salaries of staff, phone bills and vehicle expenses, of the Goyal family were paid by JIL.

It also surfaced during forensic audits that funds were siphoned off through Jet Lite (India) Limited (JLL) by way of making advance payments and investing and subsequently, writing off the same by making provisions.