September 1, 2023 23:38 | Updated Sep 02, 2023 01:13 PM IST – New Delhi
Profile photo of Naresh Goyal. | Image source: PTI
The Enforcement Directorate on September 1 arrested Naresh Jagdishrai Goyal, founder chairman of Jet Airways (India) Limited, in connection with alleged loan fraud involving about ₹538.62 crore by Canara Bank .
Grandfather. Goyal was summoned to the ED office in Mumbai to record his testimony. He was arrested after interrogation.
The ED probe is based on a case registered by the Central Bureau of Investigation (CBI) in May. Among those named is firm Mr. Goyal, wife Anita Naresh Goyal and Gaurang Ananda Shetty.
As per the allegations, the company was initially sanctioned working capital limit of ₹126 crore and domestic letter of credit/bank finance guarantee limit of ₹100 crore for various purposes. It also received a term loan of ₹400 crore for operating expenses and ₹200 crore for aircraft reconfiguration, introduction of new routes, business promotion and other related activities, besides short-term loan of ₹17.52 crore.
The first information report alleges that since August 2018, the company began claiming that it was facing liquidity and operational problems and was unable to meet its payment obligations or refund. In October 2018, the lenders decided to invoke the provisions of the inter-creditor agreement and State Bank of India was appointed as the chairperson.
Jet Airways was asked to submit a resolution plan and transfer ₹3,500-₹4,000 crore. However, the conditions were not met and the company also defaulted on the installation fee due on December 31, 2018. The banks then took the matter to the National Company Law Tribunal. In April 2019, Jet Airways suspended operations.
Canara Bank said its loan account became a non-performing asset on June 5, 2019. A forensic audit of the company’s finances covering the audit period from April 1 2011 to June 30, 2019, after which allegations of diversion and siphoning of funds were discovered.
As per the allegations, the concerned parties were paid ₹1,410.41 crore in total commission costs; and there was siphoning of funds through Jet Lite (India) Ltd. through advances or investments and are subsequently written off. During 2011-18, ₹14,552.44 crore was extended as loan to Jet Lite and in return ₹13,529.62 crore was received back.
The bank also alleges that Jet Airways is transferring loans to subsidiaries/groups through various ways. During the review period, ₹1152.62 crore was paid for consulting and professional services. Among these, suspicious alleged transactions worth ₹197.57 crore were detected in the case of linked entities.
As alleged, around ₹ 420 crore was paid to entities whose nature of business was different from the description of services in their invoices drawn up on the company.