Aviation: In a bank fraud case, ED seizes Jet Airways’ assets worth Rs. 538 crores
Virendra Pandit
New Delhi: The Enforcement Directorate on Wednesday seized properties worth over Rs. 500 crore in an alleged money laundering case linked to Jet Airways (India) Ltd, whose founder, Naresh Goyal, siphoned off funds availed as loans from Canara Bank to buy personal assets.
The properties include 17 residential flats, bungalows, and commercial buildings registered under the names of companies and people, including Jet Airways founder Naresh Goyal, his wife Anita Goyal, and son Nivaan Goyal in London, Dubai, and some states in India, the media reported.
The central probe agency attached the properties worth at least Rs. 538 crores under the Prevention of Money Laundering Act (PMLA), 2002.
Apart from the Goyals, some properties are registered under the names of Jet Air Pvt Ltd, and Jet Enterprises Pvt Ltd.
The ED had on Tuesday filed a chargesheet against Goyal and five others in the alleged fraud case involving Canara Bank.
The bank had, in the first information report (FIR), stated it had sanctioned credit limits and loans to the tune of Rs. 848 crore, to the now-grounded privately-run airline, of which Rs. 538 crore was outstanding.
Goyal was arrested by the ED on September 1 under the PMLA and is lodged in Mumbai’s Arthur Road jail.
The ED alleged the Jet Airways founder siphoned off money by creating trusts in other countries and allegedly used those trusts to buy immovable properties. The money for those trusts is nothing but proceeds of crime, the ED said.
Citing an audit report, the ED said the loans taken by Jet Airways were used to buy furniture, apparel, and jewelry, apart from properties.
During a court hearing on September 12, the businessman who once operated one of India’s biggest private airlines said the aviation sector runs on bank loans and all the funds cannot be termed as money laundering.
Goyal’s counsel Abbad Ponda, Amit Desai, and Amit Naik, told the court that he did not take any loan in his or his family’s name nor stood as a guarantor for them. A significant amount of bank loans taken by Jet Airways before 2011 were used to buy Sahara Airlines.
“This is a historical event in business. Not just Jet Airways, but other airlines, too, are in a crisis. The aviation sector runs based on funding from banks; all these cannot be termed as laundering,” Goyal’s lawyers maintained
There was a crisis in the economy and that is why he defaulted in making some repayments, they said.
The court observed that Goyal’s statements indicated he avoided giving details of all his bank accounts as well as movable and immovable properties in India and abroad.
The ED said Goyal had purchased high-value properties in Mumbai and subsequently sold them. He also formed a web of companies in India through which he has acquired a lot of immovable properties.
Citing an audit report, the ED claimed that the loans availed by Jet Airways (India) Ltd were used for purchasing immovable assets such as furniture, and even apparel, and jewelry.
Salaries of the Goyals’ residential staff and operational expenses of a production company of his daughter were also paid from the company accounts.
