Jet Airways founder Naresh Goyal sent to 14-day judicial custody in Rs 538 crore bank fraud case

Naresh Goyal. Pic/PTI

A court in Mumbai on Thursday remanded Jet Airways founder Naresh Goyal to 14-day judicial custody in a money laundering case linked to an alleged fraud of Rs 538 crore at the Canara Bank.

The Enforcement Directorate (ED) arrested Goyal on September 1 under the Prevention of Money Laundering Act (PMLA) following a long session of questioning at the central agency's office in Mumbai.

PTI reported that the 74-year-old businessman was produced before the court at the end of his ED remand on Thursday. Goyal was sent to judicial custody by the court as no further remand was sought by the probe agency.

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

The FIR was registered on the bank's complaint which alleged that it sanctioned credit limits and loans to Jet Airways (India) Ltd to the tune of Rs 848.86 crore of which Rs 538.62 crore was outstanding.

In July, the ED had initiated a fresh money laundering case against Naresh Goyal and carried out searches at several locations in Mumbai and elsewhere as part of their investigation under the Prevention of Money Laundering Act (PMLA).

The Jet Airways ceased its operations in April 2019 after a nearly 25-year run. The airline struggled to secure funds for ongoing operations and incurred substantial losses, ultimately leading to its closure.

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The central agency's action comes as a response to the continuing investigation by the Central Bureau of Investigation (CBI) into Goyal's activities. In its First Information Report (FIR), the CBI had charged Jet Airways and its founders with causing financial losses to Canara Bank. The bank asserted that a forensic audit of Jet Airways Limited revealed that it allegedly disbursed Rs 1,410.41 crore to "affiliated entities" as part of its overall commission expenses, which effectively diverted funds away from Jet Airways Limited.

In accordance with the provided Jet Airways (India) Ltd (JIL) sample agreement, it was clearly specified that the General Selling Agents (GSA) should be responsible for their own expenses, not Jet Airways Limited. A discrepancy emerged as Jet Airways Limited was allegedly found to have covered various expenses totaling 403.27 crore, which contradicts the GSA arrangement, as stated in the complaint made to the CBI, sources added. (With inputs from PTI)