ED attaches assets worth over Rs 500 cr in Jet Airways case

The properties are located across India, with some being abroad

The Enforcement Directorate (ED) has provisionally attached properties amounting to Rs 538.05 crore under the provisions of the Prevention of Money Laundering Act (PMLA) 2002 in the case money laundering case against Jet Airways (India) Ltd (JIL). According to the ED, the attached properties include 17 residential flats/bungalows and commercial premises, owned by various entities including Jetair Pvt Ltd, Jet Enterprises Pvt Ltd, as well as the founder Chairman of JIL Naresh Goyal, his wife Anita and son Nivaan. These properties are located in London, Dubai, and several states across India.

The investigation was initiated by ED following an FIR filed by the CBI, based on a complaint submitted by Canara Bank, Mumbai. The complaint alleged offences of cheating, criminal conspiracy, breach of trust, and criminal misconduct by JIL, its promoters and directors, resulting in a substantial non-performing asset (NPA) worth Rs 538.62 crore.

The ED's investigation uncovered a systematic diversion of loans from a consortium of banks led by SBI and PNB. Naresh was found to have orchestrated a large-scale financial fraud, diverting funds through inflated general sales agent (GSA) commissions, questionable payouts to professionals and consultants, and loans granted to JetLite Ltd - a 100 per cent subsidiary aimed at acquiring Air Sahara. These loans were subsequently written off through provisions in the balance sheets.

Further revelations indicated that GSA commissions were wrongfully disbursed to entities such as Jet Air Pvt Ltd (GSA of JIL for India) and Jet Airways LLC Dubai (Global GSA of JIL). Notably, JIL made payments for the operational expenses of these GSAs, all of which were beneficially owned by Naresh. The investigation further revealed that the funds received were utilised for personal expenses and investments by Naresh and his family.

Previously, the ED conducted searches and surveys at premises linked to Naresh, as well as the chartered accountants of JIL and other individuals associated. Naresh Goyal was arrested on September 1 and is currently in judicial custody. The ED filed its charge sheet before the Special PMLA Court on Monday.

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. In its FIR in May, the CBI had charged Jet Airways and its founders with causing financial losses to Canara Bank. The bank asserted that a forensic audit of JIL revealed that it disbursed R1,410.41 crore to "affiliated entities" as part of its overall commission expenses, which effectively diverted funds away from JIL.

In accordance with the JIL sample agreement provided, it was clearly specified that the GSA should be responsible for their own expenses, not JIL. Nonetheless, a discrepancy emerged as JIL was found to have covered various expenses amounting to R403.27 crore, which contradicts the GSA arrangement, as stated in the complaint made to the CBI.

Sept 1
Day Jet founder Naresh Goyal was arrested