The Enforcement Directorate (ED) made a significant move on September 1 by arresting Naresh Jagdishrai Goyal, the founder chairman of Jet Airways (India) Limited. This arrest is connected to an alleged loan fraud case involving approximately ₹538.62 crore from Canara Bank.
Mr. Goyal was summoned to the ED's Mumbai office to provide a statement, but he was subsequently arrested after the questioning session.
The ED's investigation stems from a case initiated by the Central Bureau of Investigation (CBI) in May. The people accused in this case are the company Jet Airways, Mr. Goyal, his wife Anita Naresh Goyal, and Gaurang Ananda Shetty.
According to reports, Jet Airways was initially sanctioned a working capital limit of ₹126 crore and an inland letter of credit/financial bank guarantee limit of ₹100 crore for various purposes. Additionally, they received ₹400 crore as a term loan for operational expenses, ₹200 crore for aircraft reconfiguration, introduction of new routes, business promotion, and other associated activities, along with ₹17.52 crore as a short-term loan.
The First Information Report (FIR) stated that from August 2018 onwards, Jet Airways claimed to be facing liquidity and operational issues, making it unable to meet its payment obligations. Consequently, in October 2018, the lenders invoked the inter-creditor agreement provisions, appointing the State Bank of India as the leader.
Jet Airways was instructed to submit a resolution plan and infuse ₹3,500-₹4000 crore. However, these conditions were not met, and the company defaulted on payments due by December 31, 2018. Subsequently, the matter was taken to the National Company Law Tribunal, and in April 2019, Jet Airways ceased its operations.
Canara Bank reported that its loan account with Jet Airways became a non-performing asset on June 5, 2019. A forensic audit conducted from April 1, 2011, to June 30, 2019, identified alleged diversion and siphoning of funds.
It was alleged that related parties received ₹1,410.41 crore from the total commission expenses, and funds were siphoned through Jet Lite (India) Ltd. through advances or investments, which were subsequently written off. During the period of 2011-18, ₹14,552.44 crore was loaned to Jet Lite, and ₹13,529.62 crore was allegedly received in return.
The bank also claimed that Jet Airways transferred borrowed funds to subsidiary/group entities through various means. During the review period, ₹1,152.62 crore was paid for professional and consultancy services, with alleged suspicious transactions amounting to ₹197.57 crore detected in the case of linked entities.
It was further alleged that over ₹420 crore was paid to entities whose business nature differed from the service description in their invoices issued to the company.
This arrest is seen as a significant development in the ongoing investigation into financial irregularities at Jet Airways.