Jet Airways Founder Naresh Goyal Charged in 538 Crore Bank Fraud Case

Naresh Goyal, the founder of Jet Airways India Limited, has been arrested in a money laundering case by the Enforcement Directorate (ED) after questioning at their Mumbai office. Now, ED is set to seek his custody. Goyal is accused of being involved in a scam worth Rs 538 crore. Previously, ED had summoned him for questioning on two occasions, but he did not appear.

In November of the previous year, Canara Bank filed a fraud complaint against Naresh Goyal, his wife Anita, and others. Following this complaint, the CBI registered a fraud case in May 2023. Subsequently, the ED also initiated a money laundering case in connection with the same matter.

Understand the Whole Thing in Three Points:

• A credit limit and loan of ₹848.86 crore were extended to Jet Airways, with ₹538.62 crore outstanding. This account was declared ‘fraud’ on July 29, 2021.
• On May 5, the CBI conducted searches at seven locations, including the office of Naresh Goyal in Mumbai, as well as the residences of Naresh Goyal, Anita Goyal, and Jet executive Gaurang Shetty.
• On July 19, the Enforcement Directorate (ED) registered a money laundering case based on the CBI’s FIR. ED then conducted raids and searches at the premises of Naresh Goyal and his associates in connection with the case

Bank Alleged – Money Misappropriation

Canara Bank’s allegations in the Jet Airways case include findings from a forensic audit that revealed Jet Airways had transferred a significant amount of Rs 1,410.41 crore to ‘related companies.’ These transfers were made as a way to withdraw money from the airline’s accounts.

Moreover, the personal expenses of the Goyal family, including staff salaries, phone bills, and vehicle expenses, were reportedly covered by Jet Airways. Naresh Goyal, who founded Jet Airways in 1993, stepped down as the airline’s chairman in 2019.

Jet Airways Shut Down Since April 2019

Jet Airways, at one point, held the distinction of being one of India’s largest private airlines and had also earned recognition as the largest private airline in South Asia. However, due to a significant debt burden, Jet Airways ceased operations on April 17, 2019.

In June 2021, the Jalan-Kalrok consortium emerged as the winning bidder for Jet Airways through the insolvency resolution process overseen by the National Company Law Tribunal (NCLT). Subsequently, efforts to revive the airline have been ongoing, but as of now, Jet Airways has not yet resumed its operations.

The consortium is a collaboration between Murari Lal Jalan, a Dubai-based businessman, and Calrock Capital Management Limited, a London-based global firm specializing in financial advisory and alternative asset management.

Naresh Goyal Started Jet Airways

In the early 1990s, Naresh Goyal, a former ticketing agent who ventured into entrepreneurship, founded Jet Airways India Limited, providing passengers with an alternative to Air India. Jet Airways rapidly expanded and became a major player in the aviation industry. At its zenith, the airline operated a total of 120 aircraft and ran 650 flights daily, with the tagline ‘The Joy of Flying.’

However, as financial challenges mounted, the company’s fleet dwindled, and by the time it ceased operations, it only had 16 planes remaining. By March 2019, the company had incurred significant losses, totaling Rs 5,535.75 crore. This marked a downturn from its earlier prominence in the aviation sector.