ED conducts searches against Jet Airways founder Naresh Goyal as part of money-laundering probe

The Enforcement Directorate (ED) conducted searches against Jet Airways founder Naresh Goyal on Wednesday as part of a fresh money-laundering investigation against him and others, official sources said.

The federal agency raided six-seven premises in Mumbai and some other locations as part of the investigation being conducted under the Prevention of Money Laundering Act (PMLA).

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

In February, the Bombay High Court quashed a money-laundering case lodged by the ED against Goyal and his wife on the basis of a Maharashtra Police FIR to probe charges of cheating and forgery on a complaint from Akbar Travels.

A division bench of Justices Revati Mohite Dere and Prithviraj Chavan quashed the ECIR (Enforcement Case Information Report or the ED equivalent of an FIR) registered on February 20, 2020 and all proceedings against the Goyals on the ground of "being illegal and contrary" to law.

The court order came after the police filed a closure report, stating that they found no substance in the complaint and the dispute seemed to be civil in nature. As the ED case was based on the police FIR and was the predicate offence for filing a money-laundering case, it was declared quashed by the court.

The CBI FIR came about on the basis of the Canara Bank's complaint, alleging that it had sanctioned credit limits and loans to Jet Airways (India) Limited (JIL) to the tune of Rs 848.86 crore, of which an amount of Rs 538.62 crore is outstanding.

Jet Airways has since been grounded and the CBI said the account was declared "fraud" on July 29, 2021.

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

"As per the sample agreement of Jet Airways (India) Ltd (JIL), it was noted that the expenses of General Selling Agents (GSA) was to be borne by GSA itself and nor by JIL. However, it was observed that JIL has paid various expenses amounting to Rs 403.27 crore, which is not in tune with the GSA," the complaint, which is now part of the CBI FIR, alleged.

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

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

The JIL diverted the funds for its subsidiary, JLL, in the form of loans and advances and investments extended, the complaint alleged.